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Arizona Considers Selling Capitol Buildings
Things are so bad in Arizona that legislators are considering selling the House and Senate buildings where they've met and worked for more than 50 years. Dozens of other state properties may also be sold. The plan is to sell the properties and then lease them back over several years before assuming ownership again. "We've mortgaged the legislative halls," said an exasperated state Rep. Steve Yarbrough, a Chandler Republican. "That just tells you how extraordinary the times are. To me, it's something we're going to have to do no matter how much we find it undesirable." I bet they could get a great price on the Grand Canyon.
Low taxes can have high costs.
Arizona's actual long-term plan is to sell all of their Capitol buildings and replace them with Lowercase buildings and pocketing the difference in caost.
Is this like monopoly? I tend to lose not long after I have to start mortgaging my properties to the bank.
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I've consistently said the same thing: Don't cut taxes, cut spending. Just as consistently, my thoughts have been shot down.
Well here's the final result of irresponsible fiscal policies. Congrats, the government now belongs to the bank.
With some prudence during the boom times, maybe we wouldn't be seeing so many issues during the bust? I know it's hard to imagine, but some governments paid down debt during the boom, rather than cutting taxes to unsustainable levels, only to be laughed at. Who's laughing now?
It's been a long time.
...in yesterday's post on Mike Shedlock's blog. He makes a telling point: "Bear in mind, you can only sell the Capital Building once. Then what? Is anyone looking ahead?"
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A bank needs a bailout from the government.
The government needs money to pay them.
The government mortgages their property to get money from a bank.
The government gives the money to the bank.
Who wins?
This is the worst I've heard of yet. How about they try to fix the problem instead of a temporary fix? That and I don't see how this is actually going to save any money. They'll incur the cost of moving everything to a new location, rents at the new location...etc etc etc.
If you already can buy the politicians who work there, what could be the problem of being able to buy the building itself?
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On a per capita basis, Arizona is worse off than California. The cause is due to a confluence of factors, including not saving enough for the bad times, taxes being too low or spending being too high, having such a growth oriented economy, etc.
But there are two items which I am CONVINCED are major factors as well.
1) Term limits: They suck. I used to support them, but I was wrong. Term limits result in a legislature that doesn't know WTF it's doing at any time. There is no institutional memory, and once someone understands the complex process of creating and passing legislation - they get the boot. Additionally, because no one exactly knows their jobs, term limits result in a weak branch of government, so the executive tends to dominate. This is not what our respective state constitutions intended. I wish people would put two and two together on this.
2) Illegal alien "crackdown" and employer sanctions: AZ is suffering a major real estate crisis. The crisis is for reasons obvious to anyone, but a contributing factor for our crappy economy and crappy real estate was the crack down on illegal aliens. Folks don't realize that these people rent and spend here too (often times without the societal expense us "real people" tend to cause society). When you have sweeps, a lack of employment and a general sense of animosity towards those who (in my view) are major contributors to society, they move one state over (they're not moving back to Mexico). I wish people would understand this point too.
Certainly, the overall economic factors play a very large role, but AZ has gotten itself in a big mess all by itself...
If you can read this... 01110101 01110010 00100000 01100001 00100000 01100111 01100101 01100101 01101011
So what if I buy one of these properties then break the tenants lease (pay a financial penalty or something) then I'd outright own the property? Would the building be zoned commercial or could I make one of these buildings into my house? or bed & breakfast? (which would great if I bought a jail)
Just thinking outside the box here...
Tax and spend liberals (both R and D) has even higher costs.
Here's a novel concept .... LIMIT GOVERNMENT SPENDING.
Lets start cutting all the crap out of budgets, removing social programs that don't work, and get back to basics. How about stop stupid feel good programs that do nothing but create stupid rules that cost nothing but money on things that don't work.
Yeah, times are tough. TOUGH SHIT. We can't afford all the pretty shiny programs when life was easier. Time is now to TIGHTEN our belts and get rid of cruft.
Yeah, some people might get hurt in the process, but if we continue going like we currently are, we are hurting future generations. People are already getting hurt, we shouldn't be passing that crap on to our children.
I know, bleeding heart liberals will go ape shit over this, but I don't freakin care. Because they are selfish twits who are only thinking about the here and now, and don't give a shit about the future generations.
Selling buildings and leasing them back is NOT productive in the long run, and is VERY short sighted. It is sacrificing the future instead of dealing with the core problems NOW.
CUT SPENDING, don't increase future spending to pay for today's spending.
What I would like is a automatic revocation of politicians who can't pass a balanced budget on time. You can't do that, you're fired and can never run for any office anywhere ever again. Throw them all out!
Maybe then we'll get someone besides a career politician into office who can do what is needed, even when unpopular.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
You don't live in Arizona do you? They've already cut everything they can.
I doubt this. Have a look at Wikipedia
http://sunshinereview.org/index.php/Arizona_state_budget
In 2009 the State Budget is $55 billion dollars. In 2000, the State Budget was less than half of that. Did our wages double from 2000 to 2009? If not, then why the hell did spending? Every state that is in red ink could easily avert its fiscal crisis if all it did was revert to a 2004 budget... We're not even talking 4 years ago...
There's constitutional restrictions on what they can touch (direct voter mandates cannot be cut)
This is an excuse. There is just a lack of political will to really make hard choices.
Change the State Constitution.
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The State of Arizona's budget for 2009 is $55 billion dollars. The shortfall is about a couple of billion. If all the state did was to adopt the budget from 2006, which was 42.7 billion dollars, me thinks the state would be in the black and by a pretty penny.
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There's a difference between patriotism and theft.
Look at the budget for the State of Arizona...for 2000, it was 27 billion, for 2009, it is 55 billion...
http://sunshinereview.org/index.php/Arizona_state_budget
Gov't spending is up 8% annually. Where the hell is the money going? Why do you want to raise taxes to double their current levels when people's paychecks have not gone up. Cut services... the state spending is out of control.
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Im confused here... If they sell the buildings then lease them from the new owners do they not have to pay rent? Then in a few years when the economy is better wont they have to buy it back for more then they sold it for? Real estate generally increases in value not decreases. It would make the whole deal a loss for the state then wouldnt it? I see no way that this would help out with their yearly budget except for the year they sell it. After that its only going to be a net loss.
It seems to me this sounds like a bs accounting scheme. Kinda similiar how a few states say its cheaper to keep a murderer in prison for life then it is to execute him within a few years. Its looks great in the short term but in the long run it costs much more.
It just sounds really stupid to me. I can understand trying to get some money to make ends meet but this whole deal makes me scratch my head.
Do the buildings go "ping"?
/., go to 3:00 of this. Don't worry, you'll get there some day in a distant future.
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I hadn't the slightest objection to his spending his time planning massacres for the bourgeoisie... (P.G. Wodehouse)
The economy is in poor shape now, but will probably get much, much worse in the coming years (see today's poorly performing 5 year treasury bond sales, an indicator that foreign banks and investors don't want to invest in us, even with a higher "tail" interest rates.). What makes our state legislators think that they will have more funds in a few years to buy these properties back?
It is in no one's interest that the US economy crash and burn, and that is why the oil rich countries, and China, Russia, etc. appear to be cooperating on "gently" moving the world to a "basket of currencies" rather than use the dollar as the main international exchange currency - they don't want us to crash and burn and take them with us. A slow and gradual process is the best that we can probably hope for.
How can the USA cooperate? For one thing, how about reducing federal, state, and local expenditures by 25% (OK, I just made up that amount, but it sounds about right).
Painful? You bet. Government workers will have salaries and benefits reduced, as will the general population. Deals with labor unions will be broken. Benefits form the ponzy scheme known as social security will be cut back.
Corruption needs to be nipped. As a starter, how about a tax on financial transactions that do not involve real goods and services: apply a 1% tax to hedge fund investment transactions, etc. Slow down the non-productive use of money.
Bush, Obama, and Congress have already proven themselves to be firmly in the pockets of corporations and their lobbyists - that will not change. Why should people who get to make the rules be fair with the rest of us?
In Denmark the former tax minister Peter Brixtofte was mayor in the Farum municipality (he's apparently infamous enough to get his own Wiki page in English).
He implemented a similar scheme in Denmark (now called "Farummodellen"). If we ignore the fact that this was and still is against the law in Denmark, Farum municipality has ended up with the worst economy in any municipality in the country, despite the fact that it used to be one of the richest and most prosperous ones.
To give you an idea of the state it left them in:
In Denmark we have several types of taxes, the municipalities set two types: Municipaly/council tax and property tax. All non-calculated numbers below taken from here
And compare these two for two fairly close and I think fairly comparable municipalities:
In 1995 it was 17.30 and 0.60 percent respectively for Farum (sell and lease back)
In 1995 it was 19.20 and 0.88 percent respectively for Lyngby Taarbæk
In 2005 it was 22.80 and 1.80 percent respectively for Farum (sell and lease back) (total increase of 5.94%)
In 2005 it was 19.90 and 0.83 percent respectively for Lyngby Taarbæk (total increase of 0.54%)
Taxes doesn't tell the whole story of course. So let's look at expenses for the two, calculated pr resident:
In 1995 it was (Euro)4,256 for 17,835 residents in Farum (sell and lease back)
In 1995 it was (Euro)4,526 for 49,578 residents in Lyngby Taarbæk
In 2005 it was (Euro)8,949 for 18,662 residents in Farum (sell and lease back)
In 2005 it was (Euro)7,572 for 51,611 residents in Lyngby Taarbæk
So, an increase in expenses of 110% and an increase of 4.6% of the population for the sell and lease back municipality
And, an increase in expenses of 67% and an increase of 4.1% of the population for the other one
Now, I'll be honest and say that economics is tricky, and it doesn't get easier when you factor in Brixtofte's convictions for corruption and criminal breach of trust and the still unresolved main case against him partly involving the sale and lease back issues, but all in all it really really didn't pan out in Farum, despite the municipality getting a huge (Euro)268M subsidy paid out over 15 years from the government.
Even without looking elsewhere, think of it like this:
Government owned: expenses = Maintenance_g
Privately owned: expenses = Maintenance_p + profit
The only way that (maintenance_p + profit) < (maintenance_g) is if maintenance_p << maintenance_g, in which case you'll either end up with a horribly maintained building, possibly unsuitable for people to work in, OR you're paying low level government employees way too much. Last I checked that the latter has never been the case. When's the last time you heard someone say "I'll get a nice cozy government job - it pays a lot better"?
First, it always is spending that is too high. Politicians make promise after promise because they are not truly responsible for the costs they impose on their constituents. I know some will say that is not true because we can vote them out, but we don't. Just like schools, its the other guy's politician that is bad; theirs is great. Yet while we have politicians clamor to hold corporate executives responsible for the slightest expenditure or such they allow no such hold on themselves. Throw in their truly golden retirement programs we only encourage them to laden on the promises so they can stay in office.
Just as the Federal government has lost its way so have the states. Both have moved to remove all responsibility for life's difficult decisions. They take our rights away because we ourselves have lost what our rights really are. People today are more concerned with their right to choose who the next American idol is, the right to choose their preferred cell provider, and the right to watch the channels on TV they want. Yet the turn a blind eye to rights that require self responsibility. However politicians are more than willing to step into this void and grant you rights that you already have but they do it with a twist. If you have noticed, most of these new rights come at the cost of someone else paying for it, doing the work.
As for illegals, please don't try to write off their burden on society. They consume the same if not more of the same government provided resources we all pay for yet the majority don't pay the same taxes we do. After all they aren't legal so how do we collect from them? Buying food at the local grocery and paying rent does not pay for the services our society provides. There are also many studies which show a large illegal population both committing crimes and incarcerated. You cannot have a great society if you guilt yourself consistently in to turning away from the hard decisions.
What I find amazing is that regardless of loss of income governments only resort to blackmailing the tax paying populace into paying more instead of cutting back on the frivolous or over staffed government agencies. Instead of cutting "lifestyle" agencies and such where do they hit us first? Education, police, and fire. This was well played out in Atlanta recently. Until the city folk caved and accepted higher taxes the city set about to close fire and police stations in sensitive areas - read areas where resistance to increased and undue taxation were most evident.
Yet people want to hand their right to choose their own health care to these people? Guess what, you will see endless expansion of it as well. Think its bad that Arizona is thinking of selling state property, wait till it becomes too expensive to afford your own because of the endless increases to the promises made possible by your work.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
The state needs to spend in order to keep up with population growth. It doesn't matter what the GDP is doing, the people require a certain amount of money. The alternative is to live with a lower quality of life, but we chose to have a larger budget instead.
But it's not always easy being big - and getting bigger at a rapid clip - in the middle of a desert. The growth that Arizona - and greater Phoenix, in particular - are experiencing has placed a great strain on the use of public land, roadways, and precious natural resources - especially water.
We live in a desert man, where do you think we get our water from? Do you think it's cheap? What about the people coming across the border and using emergency services, law enforcement, power, water, etc? Where are their taxes? Why am I paying for them? Maybe if they were paying their share we would have a larger GDP and you wouldn't be complaining that spending is outpacing the GDP.
There are a *lot* of issues in this state which require a lot of money. If you don't want spending to outpace the GDP, then be prepared to accept a lower quality of life as the population continues to rise.
"Our two-party system is like a bowl of shit looking at itself in a mirror." - Lewis Black
Who'd want to buy the house where the economy of Arizona died? I heard it was murdered.
It's rare that you're presented with a knob whose only two positions are Make History and Flee Your Glorious Destiny.
In the last 8 years, Arizona has had a Republican majority in their government. If they passed more spending and benefits than they could pay for, they have no-one to blame but themselves.
I live there, and I am astounded about how shortsighted and stupid the legislature is. If they keep decimating school spending, no companies will want to relocate here, and their tax base (and draw for producing citizens, not retiree's and snowbirds) will continue to shrink.
Suppose you were an idiot and suppose you were a member of Congress
In the last 8 years, Arizona has had a Republican majority in their government
The moral of the story is that the "moral majority" is just as bad at spending as the Democrats are.
If they keep decimating school spending, no companies will want to relocate here, and their tax base (and draw for producing citizens, not retiree's and snowbirds) will continue to shrink.
What amazes me the most about Arizona is that the state is sitting on top of some pretty good sized mineral deposits - gold, silver, copper... I would be hawking off mining rights. You have Resolution Copper held up in permitting, and I'd think taxes from that alone would help considerably.
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So population and inflationary costs would be in line with a 158% increase, but instead the budget increased 200%, give-or-take.
However, assuming that government is a service (something I don't assume, but most people do), the cost of providing that service should go *down* with respect to what they provide, and having a larger population should provide better economies of scale, making their services *cheaper* per person.
So the government is doing the opposite of what private services do. Getting more expensive with time rather then less, and getting more expensive the more its "customer base" grows.
"Increasing technology levels"? Technology improves efficiency and lowers cost, not the other way around. In addition, I don't think individuals' absolute wealth is really increasing any more. Any increases we should be seeing are offset by the geometrically increasing amounts of our wealth that are siphoned off by the government (especially at the federal level) to pay for wars and bank bailouts.
He who lights his taper at mine, receives light without darkening me.