Longer-term leasesmake sense for state
On Nov. 6, Georgia citizens will consider how to vote for candidates from President of the United States down to city leaders. In the midst of all we hear about candidates, some Georgians may not be aware that they will find two constitutional amendments on the ballot. Amendment 2 will allow the state to enter into multi-year leases and save taxpayers millions over the next 10 years.
When the public thinks about government spending, several big-ticket items come to mind such as education, transportation and public health. However, there are many routine budget items, like the leasing of office space for government workers, which add up quickly. In this economy, every penny counts. Should Amendment 2 be approved, taxpayers will realize significant savings on leased office space.
If we can keep government workers in existing buildings for lower rental rates, it will be more cost-effective than constructing and maintaining new buildings. Georgia taxpayers are forced to pay rates far higher than other “market” renters because of an antiquated law that prohibits the state from signing leases for more than one year. If Amendment 2 is approved, the state will have the option to execute long-term leases for government offices rather than being forced into expensive one-year leases.
This will allow Georgia to reap the same savings enjoyed by private businesses. It is common industry practice for landlords to allow much lower rates in long-term leases. This is why a 5-year lease might cost $25 a square foot, while a 1-year lease might cost $40 a square foot.
The state currently stays in leased office space for an average of 10.7 years. Passing this amendment will not extend occupancy. It will simply lower the amount paid for leased space already in use. This will help keep real estate costs lower and save taxpayer dollars.
We do this in our own lives and homes. Consider how people manage their own mortgages. With today’s low interest rates, many Georgians are refinancing and saving hundreds on house payments. They live in the same house, with less out-of-pocket cost. This is the same type of cost-savings that would take place in Georgia if we pass the multi-year lease amendment.
A conservative estimate prepared by the State Properties Commission estimates more than $66 million in savings will result over 10 years. What could we do with $66 million? We could pay the average salaries for more than 1,300 teachers or police officers.
Georgia and Missouri are the only two states with an AAA bond rating that require single-year leases. All other AAA bond-rated states allow multi-year leases. Those states have been using multi-year leases for a long time, with no ill effects. Let’s make sure Georgia does not lag behind the nation in finding innovative ways to save taxpayer dollars.
Voting yes for Amendment 2 simply makes sense. State leaders from across the political spectrum agree; this bill passed with near-unanimous support in the General Assembly. It is an investment in Georgia’s future.
