September 14, 2009 | last updated May 26, 2012 8:33 am

State Eyes Property Sales To Raise Revenue

Lawrence Cafero, House minority leader
Rep. Cameron Staples, (D-New Haven), favors selling state assets to bridge the budget gap.

State-owned office buildings, vacant land, airports and even mortgages could go on the sales block over the next two years as the state seeks to raise tens of millions of dollars to help close its budget deficit.

The $37.5 billion budget that went into effect last week includes a plan to raise $60 million over the next two fiscal years by selling state assets.

State agencies are currently developing lists of potential items that could go on the sales block. While nothing has specifically been targeted, options including state-owned office buildings and vacant land are on the table, lawmakers said.

The state treasurer and the Office of Policy and Management are charged with submitting finalized lists of possible assets to sell by Feb. 3.

The plan includes selling up to $15 million in assets for fiscal 2010 and up to $45 million in assets for fiscal 2011.

"We were looking at every possible way to close the budget deficit over the last several months and there was recognition on the part of legislature that there were various state assets that should be evaluated," said state Rep. Cameron Staples, (D-New Haven), co-chair of the state's finance committee. "The question is, what do we need to own, versus what we can afford to own, and what we can actually sell. That evaluation is the key right now."

Staples said some state-owned properties require a fair amount of upkeep and that the recent wave of early retirements by state workers might leave some office space vacancies, which could make it easier for the state to sell those buildings.

In July, Gov. M Jodi Rell wrote to all state commissioners and agency chiefs, instructing them to identify assets including land, buildings, cars and equipment that could be sold to help address budget shortfalls.

Rell stressed that all property should be considered and agency heads were told to provide their recommendations by July 27.

At that time, Rell mentioned the Seaside Regional Center in Waterford as one potential sales target.

"We must consider parting with parcels we would never consider selling in the ordinary course of business," Rell said in July.

The idea to sell state assets originated in a budget proposal issued earlier this year by Republicans, which included closing an $8.1 billion deficit with no tax increases.

At the time Republicans said they would look at selling off state assets including the state's six airports.

In subsequent budget proposals, Democrats wanted to raise as much as $112 million by selling state property, but the final budget calls for raising about $60 million over the next two fiscal years.

"We have billions of dollars in excess property and buildings," said Republican House Minority Leader Lawrence Cafero.

"We need to take an inventory of what we have, and sell what we don't need."

Cafero, who represents Norwalk, said it could be more cost effective to sell some office space and then lease it back from developers at cheaper rates and that the state should look into dumping off certain lands it has acquired in recent years for development purposes.

He said some of that land, which is sometimes sold to municipalities, remains vacant.

"What might seem to be a worthless piece of land to some, might be valuable to others," Cafero said.

Contracting out certain services, selling off the entire state fleet of vehicles and then renting them as needed, and even selling mortgages owned by the Connecticut Housing and Finance Authority, could also be a possibility, Cafero added.

Scott Pattison, executive director of the National Association of State Budget Officers, said it's not totally uncommon for states to make an effort to unload properties in order to raise money.

"In down times, there are more incentives to sell assets," Pattison said. "States tend to get more aggressive in their efforts."

Arizona, which is facing a $3 billion deficit, is considering raising hundreds of millions of dollars by selling off as many as 32 state properties, according to published reports.

Arizona's plan includes potentially selling state Capitol buildings, hospitals, state parks and prisons.

Meanwhile, California is putting up to 11 state assets on the market, according to published reports.

Both states plan to sell buildings to private developers and then lease them back, creating a short-term savings to help balance their budgets.


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