California's Budget Solution: Building Selloff

California Gov. Arnold Schwarzenegger, facing a huge budget shortfall in the state, has had to get creative with ways to save money. One of his ideas is to sell several government buildings to private investors, then lease back office space for state agencies from them.

The Atlantic's Chris Good reports the move is expected to generate a return of $1.2 to $1.3 billion to the state this fiscal year. But the long-term picture is less clear. The California Legislative Analyst's Office says the move will cost taxpayers $646 million over the next 20 years. But the state's Department of General Services, which is managing the sale, projects a $20 million profit over the same time period.

And now, two former members of the Los Angeles State Building Authority have filed a lawsuit challenging the arrangement, saying that Schwarzenegger violated various rules and procedures in pushing it through.