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Beware asset-sale proposal to close gap in state budget

July 22, 2003

Whenever money gets scarce and elected officials know that raising taxes isn't an option, two choices present themselves - cutting budgets or selling assets. We suggest West Virginia lawmakers consider a state-level yard sale carefully, because it's a trick that can only be performed once.

At a meeting last week in Parkersburg, Tax and Revenue Secretary Brian Kastick said that the state has quite a few assets that it can divest itself of to cover a $120 million gap between revenues and rising health-care expenses.

Kastick said that certain state-owned assets should be sold outright, while others should be sold, then leased back for state use. First on the list will be a number of state vehicles, to meet Gov. Bob Wise's pledge to reduce the state fleet by 555 vehicles.

It may be more difficult to sell other assets, like state parkland and some buildings, for example, if they were purchased with federal money. According to an analysis by Associated Press writer Lawrence Messina, some assets purchased with bond money can't be sold without violating the terms under which bonds were issued.

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In our view, there's a difference between reducing the size of the state's vehicle fleet and permanently disposing of state parkland. In tight times, the state can save money by paying employees mileage to use their own vehicles, saving the cost of maintenance.

But if part of the state's future is tourism, does it make sense to foreclose that future during a temporary economic downtown by selling land that was presumably purchased because of its scenic or recreational value?

We also urge the exercise of care in selling buildings with the idea of leasing them back. For those structures with only a few more years of useful life left, this may make sense, but getting a one-time windfall in exchange for a long-term rent payment only postpones the day when the state will have to finally deal with its financial problems.

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