State treasurer opposes sale of state buildings

The state’s plan to sell off 11 state buildings to private owners in order to help balance the budget drew more fire today, this time from state Treasurer Bill Lockyer.

Lockyer said the transaction, approved by the governor and Legislature, entailed long-term costs to cover short-term  operating expenses – an unwise move.

“I fully understand the difficult circumstances, and the desire to protect vital public services, that led the Governor and Legislature to authorize this sale of valuable public property.  But I believe the deal is poor fiscal policy and bad for taxpayers,” Lockyer, a Democrat, said in a statement released by his office.

He said he would direct his representative of the state Public Works Board to vote against the early retirement of the state’s outstanding debt on the properties – a key piece of the sale-lease back.

The sale provide about $1.2 billion to the state’s strapped general fund. The state budget faces a $25.4 billion shortage over the next 18 months.

Lockyer isn’t the only one to raise major questions about the transaction.

Earlier, the nonpartisan Legislative Analyst said the deal would cost the state hundreds of millions of dollars more than previously projected with a long-term interest rate of about 10 percent – more than the state pays for bond borrowing.

The administration has said the proposal would save the state millions of dollars – perhaps $2 million annually over 20 years.