Governor Jerry Brown's scrapped a plan to sell 11 state offices to help close the state's budget deficit. The Schwarzenegger Administration put the properties up for sale last year in hopes of reaping about a billion dollars in cash. Brown’s offered an alternative plan to raise that money.
The California Supreme Court Building was one property on the block, along with the Ronald Reagan State building in Los Angeles and the Attorney General’s Office in Sacramento.
The plan was to sell state buildings, use the proceeds to plug the deficit and then rent them from the new owners at an increasing rate over decades. The state legislative analyst equated the deal to borrowing at a 10 percent interest rate.
Governor Brown says he can do better than that.
"The buildings that were attempted to be sold," Brown says, "were buildings that the state would always use, some of them are very new – so disposing of assets that are still needed and to do so incurring tremendous rent charges doesn’t make any sense."
So, instead, Brown wants to borrow $800 million from the state’s “special fund” reserves. Those hidden pots of cash pay for health, transportation and construction programs.
Brown says his plan won’t affect those programs or delay projects. Brown plans to pay the money back over a couple years at less than 1 percent interest.