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ASK THE EXPERTS

What’s Amendment 2 on the ballot all about?

POSTED: October 24, 2012 4:00 a.m.

Now that early voting has begun, many voters are learning for the first time that there are two different constitutional amendments to the Georgia Constitution at the end of the ballot.

The first amendment, concerning public charter schools, has received a lot of attention.

The second amendment, however, has been largely overlooked, and I have received a number of calls asking, "What is the purpose of this amendment?"

This second amendment will allow the state to enter into multi-year leases, which the State Properties Commission expects to save taxpayers an estimated $66 million over the next 10 years.

If you have ever rented an apartment or office space, you know that landlords are usually willing to reduce the rent if you sign a multi-year lease.

Landlords do not like empty buildings, so they are more likely to give you a better deal if you agree to stay for more than one year. Landlords are also more willing to make improvements when tenants sign multi-year leases.

Unfortunately, the state of Georgia cannot take advantage of the savings multi-year leases offer because the state constitution currently allows state agencies to sign only one year leases.

As a result, state agencies must renegotiate their leases each year and pay the higher year-to-year rental rate, regardless of how long the agency plans to lease the property.

If voters approve Amendment 2, some state agencies will have the option to enter long-term leases for government offices without obligating present funds rather than being forced into expensive one-year leases.

The state currently leases 1,800 properties, primarily for office space.

The average occupancy for the state in a particular location is 10.7 years, so this amendment makes sense.

It will not extend state occupancy of buildings, but it will lower the amount paid for leased space already in use.

Under the amendment, multi-year leases could not extend beyond 20 years.

Multi-year term leases will require the state to make a financial commitment to lease the office space in future years without knowing whether future state budgets will provide funding necessary to continue the lease.

Therefore, each multi-year lease would be required to include a clause stating that the lease is subject to annual budget appropriations.

The State Properties Commission has surveyed 19 other states that allow multi-year leases with private landlords and found that none have experienced problems.

States with AAA bond ratings, like Georgia has, have not seen their credit ratings drop. It is just good business.

Rep. Amos Amerson can be reached at 689 N. Chestatee Street, Dahlonega, GA 30533; phone (706) 864-6589; e-mail hamerson@windstream.net. Or contact Gerald Lewy at (706) 344-7788.

 

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