Civitas Review

Time to Downsize State Assets?

none
Jun
24

Per this N&O article, House Speaker Thom Tillis has appointed a committee to review state-owned assets and consider selling some of them off.

The committee, to be led by Rep. Harold Brubaker, will consider whether the state's ownership of certain assets is necessary, or if a sale would provide a better return and free money for other uses. Such "disposable" assets could include land, buildings, aircraft, vehicles, railroads and hospitals.

"This is driven by the new Republican leadership and its vision of a business approach to state government," Tillis spokesman Jordan Shaw said. "The purpose of this committee is to study whether the state has gotten into asset management where it shouldn't."

Such a committee is long overdue. For some perspective on the North Carolina state government's role as property owner and manager, this 2008 Fiscal Research report lends some interesting insight: 

  • A firm called Equity Office is the largest publicly traded office management company in the U.S. Equity owns 300 office buildings totaling 50 million square feet
  • The state of North Carolina owns 11,804 buildings totaling 107.8 million square feet – or roughly 40 times the number of buildings owned by Equity Office
  • The state also owns 8,500 parcels of land
  • The "replacement value" of the buildings alone comes to $14.9 billion

There is no telling how many millions (or billions) the state could reap by selling off, say, the least-essential 10 percent of state-owned assets. It wouldn't just be a one-time windfall, either. Going forward, the state would be relieved of upkeep and maintenance of these buildings and land – saving millions every year. Moreover, the revenue from the sell-off could be used to pay down the state debt, or begin to pre-fund the $33 billion in unfunded healthcare benefits for state retirees.

Either way, selling these assets could relieve taxpayers for many years to come.

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