DALLAS — Buying back Arizona’s capitol complex on the state’s 100th anniversary will cost $106 million but will save $47.5 million in finance costs, according to estimates in Gov. Jan Brewer’s proposed $8.96 billion budget.
Facing a budget deficit in 2010, Arizona raised nearly $1 billion for its general fund through the sale and lease-back of most state office buildings using certificates of participation.
Now Brewer is asking lawmakers to draft a bill to buy back the capitol complex, the most symbolic of the buildings sold. Senate Appropriations Committee chairman Don Shooter, R-Yuma, said he supports the plan to pay off the debt certificates.
In a joint statement, Senate Minority Leader David Schapira, D- Tempe, and House Minority Leader Chad Campbell, D-Phoenix, cited the sale of the state buildings as a failure of the “Tea Party” Republicans and said it would cost $1.6 billion to buy all the buildings back.
In her message to the legislators delivered with the budget on Friday, Brewer, a Republican, called the decision to sell the buildings “heart-rending but necessary.”
“We have been severely tested by this recession, but I firmly believe the worst is behind us,” she said.
With proposed spending increases of 4.9% in fiscal year 2013 and 2.4% in fiscal year 2014, Brewer’s $8.96 billion budget would restore some funding for schools and offer state workers their first pay raise in five years.
Infrastructure proposals that could be covered with bond debt include $105 million to modernize the state’s technical systems and replace the entire financial and accounting network.
The governor also wants $60 million for new prison construction, including $50 million for a state-run maximum-security prison.
With Arizona’s economy and state revenues improving, Standard & Poor’s on Dec. 21 revised its outlook on the state’s AA-minus issuer credit rating to stable from negative. Moody’s Investors Service retains the negative outlook it placed on the state’s Aa3 rating in February.
Analysts indicated that the state still faces weakness in housing but that the revenue picture is expected to improve, even when a temporary 1-cent sales tax increase expires in 2013.
“We anticipate that the state economy and housing market will continue to stabilize and show signs of improvement, while Arizona will take action to bring recurring revenues and expenditures into structural alignment if needed,” S&P analysts wrote last month.