Gov. Jan Brewer’s proposal to buy back state buildings sold in 2010 is meeting scrutiny from House Democrats, who consider it a “symbolic gimmick.”
At her Jan. 9 State of the State address, Brewer asked the Arizona State Legislature to send her a bill that will buy back buildings in the Capitol complex by Feb. 14, the anniversary of Arizona’s statehood.
Brewer’s plan calls for allocating $106 million to buy back the deeds to the Executive Tower, State House of Representatives and the State Senate buildings. Democrats, including Rep. Anna Tovar, said the money could be better spent.
“$106 million for a piece of paper is, in our opinion, the worst birthday present we could give Arizona,” Tovar said.
One of the main arguments Tovar offered against Brewer’s plan is that the debt will not be immediately repaid.
“It’s not like a house,” she said. “We can’t just pay off the mortgage and immediately own the buildings.”
Instead, the sum will be placed into an escrow account to be used for payments to bond holders until 2019, said Matthew Benson, director of communications for the Governor’s Office.
Benson said immediately putting this money into the account would result in savings of $47.5 million in interest payments after the debt is fully paid off in 2019.
“It’s fiscally smart to make this deal,” Benson said.
Although placing the $106 million in the escrow account would end monthly payments from the state, the bondholders are entitled to payments for 10 years, Benson said. These payments will come from the escrow account.
He also said it is important that the Capitol complex be bought back during Arizona’s centennial year.
“It’s symbolically important that the state buy back our Capitol this year,” Benson said.
House Democrats fear the proposed buyback is solely a symbolic move and will not help Arizona’s infrastructure.
Tovar listed several other funding priorities the Democrats would place ahead of paying for the Capitol buildings, including health and human services, higher education and tourism.
She also opposed Benson’s reasoning that the debt should be paid now because the government has money to pay it now and may not in 2019.
“It’s eight years away,” Tovar said. “We should try to focus on the issues that are happening now.”
She said the state is heading for a financial crisis in 2014, according to the nonpartisan Joint Legislative Budget Committee, and it would be better to use the surplus to plan for the future and combat this predicted crisis.
Tovar said House Democrats would not approve a budget that calls for the immediate use of state funds to pay for the Capitol complex, though they may support buying the buildings back gradually.
Professor Dave Wells, who has taught political science courses, said it is not clear if it will be advantageous for the state if the Capitol is bought back now.
“There doesn’t seem to be enough of an economic benefit to do it now,” Wells said. “The tradeoff means not spending money on other things that have been cut in the budget.”
Reach the reporter at julia.shumway@asu.edu or follow @JMShumway on Twitter.
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