A Virginia Land Inventory
By John Palatiello • Jan 6th, 2010 • Category: Feature, Land Use
While Connecticut is known as ‘The Land of Steady Habits’, that moniker may better describe Virginia. Things change slowly in the Old Dominion, and when they do, those changes are not very radical.
The steady Nutmeg State has become the latest to conduct an inventory of state owned real estate and implement a process to sell surplus property in order to apply the receipts to a higher priority – closing its budget gap.
As suggested in a previous Bacon’s column, it is time Virginia join the growing number of states that are implementing this common sense strategy.
Remember the episode in the 2008 Presidential campaign, when candidate John McCain could not answer a reporter’s questions about how many houses he owns? Come January 16, Governor Bob McDonnell will be able to accurately answer the question, “how much land, building, houses, offices, and other real property does the Commonwealth of Virginia own?”
Given the budget gap Governor Tim Kaine will leave behind, the need to fund a transportation program and the McDonnell Administration’s publicly stated desire to reform and reduce Virginia state government, a land inventory and surplus property program should be a top priority for the Commonwealth. As CEO of the state, Mr. McDonnell should open his first Cabinet meeting with the question – “What are we doing, how well do we do it and is it all necessary?” Included should be a query as to what the Commonwealth owns and whether it needs to own it.
Not since the Allen Administration has Virginia had an inventory and surplus strategy. The idea, however, has enjoyed bipartisan support, including endorsement from Governor Warner’s Commission on Efficiency and Effectiveness, chaired by former Governor Wilder, and the Joint Legislative Audit and Review Commission (JLARC).
From Connecticut to California, from Ohio to Georgia, states have identified fair grounds, abandoned prisons, armories, football stadiums, race tracks, golf courses, plantations, heliports and other real estate that have been candidates for sale to the private sector or to local government. The process has generated millions of dollars.
As suggested in an earlier column, the Code of Virginia currently requires 50 percent of the revenue from surplus state land sales to be dedicated to the Conservation Resources Fund for further land acquisition. The General Assembly should pass legislation to amend the law to dedicate surplus land sales revenue to the Transportation Trust Fund. The McDonnell Administration should require the Department of General Services to conduct an inventory of all real property owned by the Commonwealth and annually update the catalog. The Governor should request an annual report on the inventory and recommendations regarding property that may be immediately surplused.
Alternately, the Governor could invite proposals from private firms, pursuant to the Commonwealth’s innovative public private transportation and education facilities and infrastructure laws, for private sector proposals to lease state land for better and higher uses that will generate, rather than consume, tax revenues.
“We have a spending problem more than we have a taxation problem,” McDonnell said in The Daily Progress (December 3, 2008). He told The Washington Post (June 11, 2009) “The worst thing you can do is to tax your way to prosperity.”
Rather than raising taxes, McDonnell should help fund transportation through a surplus property sales program. Conducting a land inventory and selling surplus property will help implement his campaign pledge to conduct independent audits of state agencies and provide a greater level of transparency into the activities of state government. It will also help make government more efficient.
John Palatiello president of the firm of John M. Palatiello & Associates, Inc., a public affairs consulting firm located in Reston, Virginia, providing association management and public affairs services to firms and organizations. He has been Executive Director of MAPPS, a national association of private geospatial firms, since 1987, is Administrator of the Council on Federal Procurement of Architectural-Engineering Services, a coalition of the nation’s leading design professional societies and and President of the Business Coalition for Fair Competition, a coalition of firms, organizations and individuals fighting unfair government-sponsored competition with private enterprise. He is the former Executive Director of America Moving Forward , a non-profit association of firms engaged in public private partnerships in transportation.
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but the transportation funding issue is structural and won’t be fixed by one-time influxes of money – right?
The shortfall, depending on who one listens to is on the order of a billion a year so in order to build a fund that could yield a billion a year in interest… we’d need what? at least a 10 billion fund?
but no matter which way we go – the problem is an annual one..not a one time one.
Larry — If the land is sitting there unused and government-owned, it is generating no tax revenue for local governments or the Commonwealth. If it is sold or leased, it will likely be generating ongoing tax revenues (local property taxes, sales and income taxes from economic activity occurring on the property) in addition to any one-time sales proceeds.
The idea of selling state property to close a budget gap is fiscally irresponsible and short sighted.
State property would be used once, and then what about next year? And the year after that? What about when the state wants to use the property again in the future? Virginia could rent the property back from the private owner.
This idea is as bad as the proposal to privatize the ABC stores – a one-time killing of the golden goose to address today’s problem, while ignoring the long-term needs and possible revenues.
Virginia is the best managed state in the country according to different lists, and in different ways – the last thing Virginia needs is to take cues from California, Connecticut or John Palatiello.
The Department of General Services (DGS) is currently working to populate a database that contains all state-owned property as well as leases. While the structure is complete, the information in the database is incomplete, as it is dependent on reporting by other state agencies. While all surplus property is supposed to be managed by DGS, agencies do not report these properties and instead keep the properties on their balance sheet so they can use them to meet budget reduction targets during shortfalls. The General Assembly should require an accounting of all properties by each agency with real consequences for not reporting or misreporting surplus property.