[caption id="attachment_25847" align="alignleft" width="312" caption="The Judge Joseph A. Rattigan Building in Santa Rosa was one of 11 state office properties proposed to be sold for $2.33 billion to buoy state finances. (courtesy of the Department of General Services)"][/caption]
SANTA ROSA -- Gov. Jerry Brown today said he is canceling the pending sale of 11 state office buildings statewide, including the Judge Joseph A. Rattigan Building in downtown Santa Rosa, calling the court-challenged deal to raise $1.2 billion for balance state finances under the previous administration "short-sighted."
"The sale and leaseback proposal was short-sighted and would have cost taxpayers billions of dollars in the long-run," the governor said in a statement. "Selling and leasing back the state’s buildings for one-time gains is not prudent."
The $2.33 billion sale and leaseback was authorized in the 2009-'10 budget, and the proceeds were assumed in the current budget. The Legislative Analyst's Office estimated that leasing the properties, starting at $56 million the first year, would cost the state over 35 years $6 billion more owning them.
Gov. Brown proposes amending his recent budget proposal to include borrowing $830 million from special fund reserves to partly compensate. The rest would come from "additional revenues and cost savings," according to the governor, including $90 million more from the Medi-Cal managed care tax and $100 million less in prison infrastructure project costs.
Loans from fund reserves would come from reserves and not program budgets and be paid back by fiscal 2013. Money would be transferred back if needed for programs. Interest costs are estimated to be $18 million.