Californians facing landmark decisions
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Kai Ryssdal: By now you’ve probably heard, California is going broke. And it’s got plenty of other states as company. Next week, California will hold a special election to try and balance its budget. If the measures don’t pass, the state could be staring at a $21 billion deficit. Even if they do, California Governor Arnold Schwarzenegger is looking for additional ways to raise money. Today he’s expected to unveil a novel approach: put a few state landmarks on the market. Marketplace’s Jennifer Collins reports.
JENNIFER COLLINS: Here’s one of the properties California is looking to sell: More than 200 acres of prime land, ocean views, a state of the art security system. And its been the inspiration for artists like Johnny Cash.
JOHNNY CASH (singing): San Quentin I hate every inch of you.
That’s right San Quentin Prison could be yours. Also on the list: The L.A. Coliseum, the Orange County Fairgrounds and The Cow Palace — an exhibition center near San Francisco. All told billions of dollars in California real estate. Tom Power is with SRS Real Estate in the Bay Area. He says developers are already salivating over some of the state’s assets, especially if they can get them at recession prices. But there are issues.
TOM POWER: There will be a lot of red tape especially in places where development is very difficult. It will take years for a developer to move through that process.
And Power thinks financing could be tough in the recession. Jon Shure tracks state spending at the Center on Budget and Policy Priorities. He says other states put turnpikes, real estate and lotteries on the block. But he says selling assets is the last thing a state should do to raise revenue.
JON SHURE: It’s kind of like selling your furniture to pay your bills. The problem is that someday this economic recession will end, and states will be back on their feet, but the assets will be gone.
And all the revenue they would have brought in.
I’m Jennifer Collins for Marketplace.
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