LOS ANGELES, CA - NOVEMBER 02: California Gov. Arnold Schwarzenegger speaks after voting in the midterm election at Kenter Canyon Elementary School on November 2, 2010 in Los Angeles, California. Former eBay CEO and Republican candidate Meg Whitman is running against California Attorney General and Democratic candidate Jerry Brown for the Governor's seat while U.S. Sen. Barbara Boxer (D-CA) is in a tight race against Republican senatorial candidate and former head of Hewlett-Packard Carly Fiorina. (Photo by Kevork Djansezian/Getty Images)
I understand why Gov. Arnold Schwarzenegger keeps trying to sell off state buildings. The state needs money, and there are no good options. And the sales were part of a previous budget agreement.
But the more scrutiny these sales get, the worse the deal looks. In fact, when one accounts for the fact that the state will have to lease back these buildings, selling the 11 state properties in question costs California in $1.4 billion in present dollars (or $6 billion over 35 years), according to the non-partisan Legislative Analyst's Office. State financial officials say the sales amount to a very high-interest loan, with the borrowing higher than the rate the state could get in the markets.
Now Schwarzenegger faces another lawsuit over the sale. It's time for him to drop the sales. They are more trouble than they are worth, and they aren't worth much.