Kansas Department of Administration compiles list of state assets; sale of properties possible
State leaders face a tall task in the coming months to balance a budget on the back end of historic decreases in tax revenue, the impending loss of federal stimulus funds, a school finance lawsuit and a call from some to cut taxes. One idea that has been discussed as a way to generate more revenue is the sale of state assets.
In the closing hours of the last legislative session, some Republicans pushed selling state assets as a way to avoid a tax increase.
“This is a great time to sell assets,” Rep. Marvin Kleeb, R-Overland Park, said at the time.
Problem was Kleeb and his supporters didn’t have any specifics on what the state could sell and how much it would raise.
In fact, there wasn’t even an inventory that existed that showed all the things the state owned.
Now there is.
Compiled by the Kansas Department of Administration, the list is 90 pages long and includes thousands of entries, from armories to fishing lakes to rights of way to university buildings. There is a lot of land, a printing plant, cemeteries, museums and office buildings.
But the value of all this is unknown.
“In many ways, we would know what we paid for it, but in terms of what it is worth today, you’d have to have every piece of land appraised,” said state Budget Director Duane Goossen, who is also secretary of the Department of Administration. “It would take an incredible effort to do that.”
Most of the assets are in use.
Goossen said the next step is to develop by January a list of things that could be sold. He said that would be done by both the outgoing administration of Gov. Mark Parkinson and the incoming administration of Gov.-elect Sam Brownback.
Arturo Perez, a fiscal analyst with the National Conference of State Legislatures, said there are examples across the nation of governments selling, or proposing to sell, revenue-generating assets to private companies for upfront cash.
Some of these include toll roads, parking meter systems, lotteries and even scrutinizing tobacco settlement funds.
“States have been dallying in this for years,” Perez said.
But the jury is out on the financial wisdom of these decisions, Perez said.
And they have political repercussions.
The operation of the Indiana Toll Road was sold to a private consortium for $3.8 billion in 2006. But controversy over the transaction helped Democrats in Indiana, who opposed it, make big political gains shortly after the deal was made.
In Kansas, the idea of selling the 236-mile Kansas Turnpike pops up every now and then but never gets any political traction. In 2006, Citigroup and Goldman Sachs Group Inc., issued reports that said the Kansas Turnpike could be leased for $300 million to $3.15 billion depending on how high tolls could be increased. But legislators thumbed their nose at the reports.
California recently sold government buildings and will lease the space back. The deal provides some upfront cash that helped California address an immediate budget gap but will cost more in rent over the long-term.
But Perez said during the recession there has been no lack of creativity among states in trying to find ways to generate more revenue.
The full list of properties may be downloaded here.
By Scott Rothschild