A decade ago, in the depths of the worst recession in modern U.S. history, Arizona lawmakers took perhaps the most extreme step of any state facing massive budget deficits: They sold their state Capitol building and the buildings that house the state House and Senate.
Now, with coffers flush with revenue, the state wants to buy those buildings back.
Gov. Doug Ducey (R) said Monday he would move to pay off debt and reclaim ownership of legislative buildings, the state fairgrounds and the building that houses the state Supreme Court.
The plan to sell the buildings and lease them back netted Arizona some $735 million, money that then-Gov. Jan Brewer (R) used to deal with part of a $3 billion budget shortfall in 2010.
But it also earned national derision as a short-sighted move that would cost the state twice as much as it brought in. Arizona had to pay more than $60 million annually to lease back those buildings over 20 years. "The Daily Show" even sent a reporter to inspect the building in a mocking segment.
Ducey, who addressed legislators in his annual State of the State address Monday, said Arizona’s finances were now full enough to reverse what his office called “one of the most infamous budget gimmicks of the Great Recession.”
“When I stood here four years ago, we faced a $1 billion deficit. It’s not by accident that today, we’ve got a $1 billion surplus. And breaking news, somebody call 'The Daily Show,' we even own this building again,” Ducey said.
The refinancing will save Arizona about $109 million in debt payments over the next decade, Ducey’s office projected.
Arizona legislators are still tenants in their own buildings, at least for now: The deal is likely to be completed by July, Ducey’s office said, when the state's 2020 fiscal year begins. The state will issue bonds to refinance its debt to the building’s owners, a private real estate company.