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Reason Foundation

State Asset Inventories, Divestiture are Key Reform Tools

Leonard Gilroy
January 4, 2009, 1:36pm

Reason friend and colleague John Palatiello has an excellent article today in the newly-relaunched Bacon's Rebellion advancing a innovative proposal to use asset divestiture to fund augment transportation funds in Virginia—not to mention the obvious additional benefit of enhancing the effectiveness and efficiency in government (for starters, I know what land I own, right; shouldn't government?):
Georgia Governor Sonny Perdue (R) and Ohio Treasurer Richard Corday (D) both had questions they could not answer: how much land does the state own, where is it, what is it worth and is anyone interested in putting such land to a more productive use? Perdue and Corday embarked upon efforts to develop state land inventories to answer those questions. Georgia now operates the Building, Land and Lease Inventory of Property (BLLIP), an interactive web-based geographical information system designed to enable registered users to query, search and generate reports using real time information about state owned and leased properties and buildings. Ohio has implemented a Comprehensive Inventory of State Real Property, a database of 53,010 distinct state-owned parcels located throughout all of Ohio's 88 counties. Similar efforts in Virginia have fallen behind. Governor Allen appointed a Blue Ribbon Strike Force on Government Reform that recommended that "all state agencies should inventory and justify the retention of each individual real estate holding." Allen also formed the Governor's Commission on Surplus Property, leading the way to identifying the "Elko" property in Henrico, which ultimately became the site of the Qimonda semi-conductor plant, as surplus. Governor Warner's Commission on Efficiency and Effectiveness found that Virginia did not have an adequate portfolio management system for handling real estate in the Commonwealth and suggested that the possible beneficial sales and public-private development of surplus property be maximized by developing better methods for designating property as surplus and by re-examining the opportunities for property that has already been designated as surplus. As of 2006 the Joint Legislative Audit and Review Commission (JLARC) found these reforms had not been fully implemented. A current, accurate, comprehensive state land inventory is an idea Virginia should reinvigorate. Here are steps that could be undertaken in the Commonwealth: Require an appropriate agency to compile a current, accurate inventory of all land owned or leased by the Commonwealth of Virginia in a parcel based "cadastre" or geographic information system. The Commonwealth has a statewide GIS, known as the Virginia Base Mapping Program, operated as part of the Virginia Geographic Information Network (VGIN); Require a review of all parcels that includes an analysis of whether the land serves the mission and priorities of the agency, whether ownership by the Commonwealth is needed and whether ownership by the Commonwealth is the highest and best use of the land; Declare as surplus and put out for competitive disposal all lands that are currently owned by the Commonwealth and no longer need to be, in accordance with the steps above; Designate that 100 percent of the proceeds generated from the sale of unneeded land goes to transportation. This will require new legislation as current law (Code of Virginia 2.2-1156 sale or lease of surplus property) requires 50 percent of the proceeds of the sale of surplus property go to the Conservation Resources Fund; and Require an update of the inventory and the review and surplus/disposal of unneeded land on an annual or biennial basis. In Ohio, House Bill 420, sponsored by Rep. Tom Brinkman Jr. (R-southwestern Ohio), was recently signed by Ted Governor Strickland (D) after having passed the House and Senate by overwhelming margins. The law not only provides for transparency in government spending, but statutorily creates a council to coordinate management of property owned by the state, including an inventory and providing an assessment of the disposal potential. Treasurer Corday was elected Ohio's Attorney General on November 4, so the newly passed law will make the inventory process permanent, rather than the administrative initiative of an individual Treasurer. Georgia won the 2007 Innovations Award from the National Association of State Facilities Administrators (NASFA) for its BLLIP program. The award recognizes efforts to enhance efficiency and effectiveness in state government. It has recently added features such as a risk management interface, total cost of ownership details and portfolio management. With this information the state is better able to determine where space is available, to negotiate better lease terms, to identify surplus or underutilized property and to provide better resource allocation for the taxpayers of Georgia. A current, accurate land inventory is a government reform that is sweeping the nation. Governors, legislators and other officials in states across the country are recognizing the value of knowing what they own, where it is and whether there is a compelling case for continued state ownership. Legislation to establish a Federal land inventory, known as the Federal Land Asset Inventory Reform Act (FLAIR) has been introduced in Congress.
Read the whole thing here. Also, check out my piece on privatizing state psychiatric services and facilities in the same issue.

Leonard Gilroy is Director of Government Reform


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