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Little-known amendment may save taxpayers millions

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POSTED: October 22, 2012 6:00 p.m.

Throughout Georgia next month, citizens will consider how to vote for candidates from president of the United States down to county leaders. In the midst of all we hear about candidates, some Georgians may not be aware they will find two constitutional amendments at the end of the ballot. The second will allow the state to enter into multiyear 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 can add up quickly. In this economy, every penny counts. And should Amendment 2 be approved, taxpayers will realize significant savings on the cost of leased office space.

If we can keep government workers in existing buildings for lower rent, it will be much more cost-effective than constructing and maintaining new buildings. Under current state law, however, 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 five-year lease might cost $25 per square foot, while a one-year lease might cost $40 per square foot.

It’s called real savings for taxpayers. The state currently stays in leased office space for an average of 10.7 years. Passing this amendment will not extend occupancy. Instead, it simply will lower the amount paid for leased space already in use. This will help keep real estate costs much 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 their house payments. They live in the same house with less out-of-pocket cost and greater savings. This is the same type of cost-savings that would take place in Georgia if we pass the multiyear lease amendment.

As a businessman and state leader in Georgia, this makes a lot of sense to me.

A conservative estimate prepared by the State Properties Commission estimates more than $66 million in savings will result during 10 years, with the potential of even more future savings. What could we do with $66 million of taxpayer savings? We could pay the average salaries for over 1,300 teachers or police officers in Georgia.

This is a safe and fiscally sound approach that is working in many other states. In fact, Georgia and Missouri are the only two states with an AAA bond rating that requires single-year leases. All other AAA bond-rated states allow multiyear leases. Those states have been using multiyear 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.

As a businessman and state leader, voting yes for Amendment 2 simply makes sense. And state leaders from across the political spectrum agree, which is why this bill passed with near unanimous support in the General Assembly. It is not only a way to save millions of taxpayer dollars; it is an investment in Georgia’s future.

Cagle is Georgia’s lieutenant governor.

 

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