If we could get $3 billion for, say, the Grand Canyon, our budget mess would end; but, seriously, selling some infrastructure makes sense
What could Arizona "sell" to investors raise money? The Grand Canyon, Lake Havasu and Saguaro National Park all would be substantial income-generators. Not to mention The Thing.
Is there part of Arizona that someone would want to buy? Something we could sell to raise money – like a swap meet for the state?
Probably. Interstate 10 between Tucson and Phoenix is the ugliest piece of real estate in the state, but it carries a lot of traffic. It would be worth a lot.
The state prisons are popular places, with about 40,000 guests. Someone would be willing to buy them. Lake Havasu is popular with a different crowd, but it has a steady revenue stream.
We’ve also got a lot of beautiful places. Saguaro National Park should be worth something. And the Grand Canyon. It’s one of the Seven Natural Wonders of the World – the only one in the United States. I bet we could get a bundle for selling that place.
And there’s The Thing, which is almost as famous as the Grand Canyon. Unload that place to a private investor, and Arizona could rake in big bucks.
Why not? Other states have eased their financial problems by selling off things, then leasing them back. Investors have been losing money on most everything else, so they’re looking for opportunities where the risk of loss is low and reasonable returns can be had.
In 2006, Indiana “sold” its Indiana Toll Road for 75 years for $3.8 billion. The investor who “bought” the road keeps the revenue for 75 years, then turns the road back to the state. That $3.8 billion would solve Arizona’s budget problem for next year in a single move.
Chicago, Pennsylvania and Massachusetts all have sold highways. Chicago and Minnesota are planning to sell airports. Several states are selling their lotteries.
New York is going wild, with a commission appointed to study whether the state can sell, then lease back a bridge, the lottery, golf courses, toll roads, parks and beaches.
With that much to choose from, Arizona is going to have to come up with something no other state can offer. Like The Thing.
Now obviously, there may be some problems with Arizona selling the Grand Canyon and some other places. The federal government, which runs the canyon, may be cool to the idea. And we’d have to get some assurances that the new “owner” wouldn’t deface the place with advertising.
But in all seriousness, it is a viable idea. And it is just one proposal outlined in a report by the Fiscal Alternative Choice Team – a group of economists and researchers from Arizona’s state universities.
Earlier this year, when universities were complaining about being financially gored by the Legislature, state Senate President Bob Burns suggested that people at the universities come up with their own solution.
The universities actually took him up on it, producing an exceptionally well-researched 65-page report on how the state got into this mess and what it could do to pull out.
The report says the state cannot erase next year’s $3 billion-plus deficit with spending cuts alone. “A more balanced approach is required,” it concludes. That would mean more revenue, which would mean more taxes, which would mean it won’t happen.
Nonetheless, there are a number of solid ideas the Legislature shouldn’t dismiss. The panel suggested, for example, that a dedicated funding source be established for school construction – a move that makes perfect sense and would take a huge expense out of the state general fund.
It also recommended raising and restructuring the state income tax structure – an idea that’s DOA.
The income tax for an Arizona household earning $25,000 annually ranks 17th among the states. But for households earning $50,000 per year or more, the Arizona income tax ranks 41st or lower. Low-income people pay more than they should; higher-income people pay less than they should.
But in all likelihood, compiling the report was a colossal waste of time.
Every few years, someone is asked to produce a report on how the state should fix its finances (then-Gov. Janet Napolitano had a dandy one done). Then everyone nods, strokes their chins in thought, tosses it on a shelf and forgets it.
We may not put the Grand Canyon up for sale. But we’ve got to do something creative – and there are a number of good ideas in this soon-to-be-forgotten document.
Mark Kimble appears at 6:30 p.m. Fridays on the Roundtable segment of “Arizona Illustrated” on KUAT-TV, Channel 6. He may be reached at mkimble@tucsoncitizen.com or 573-4662.
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READ THE REPORT
Read the Fiscal Alternative Choices Team report (pdf)