Editorial: Rent confusion

It’s difficult to see how the state’s current lease strategy is good for Kansas taxpayers.

It’s hard to sort out the state of Kansas’ strategy on rental rates it charges its own agencies. On the surface, the strategy doesn’t appear to benefit taxpayers.

Earlier this week, Journal-World reporter Peter Hancock reported that the Kansas Board of Regents moved its phone lines and computer network servers off the state’s internal system and onto the Kansas Research and Education Network, based at the University of Kansas. Regents officials said by going to outside vendors, the agency expects to save about $75,000 a year, which will help offset higher rental rates it pays the state for space in a state office building.

The Department of Administration is a state agency that provides support services, including building and facility maintenance, to other state agencies. It is funded primarily through rents and fees that it charges back to the other agencies that use its services.

Gov. Sam Brownback has been aggressive in reducing the amount of real estate that the state owns and occupies. As a result, the 10-story Docking State Office Building just west of the Capitol is nearly vacant as state agencies increasingly lease office space elsewhere in Topeka.

And as the number of agencies renting space from the state decreases, the rent charged to the remaining tenants goes up. Last year, the increase was 27 percent to $19.40 per square foot.

For the Board of Regents, the increase amounted to $91,000 annually. The increases were significantly more for larger agencies like the Kansas Department of Education and the Department of Transportation.

Deputy Education Commissioner Dale Dennis said the rental increases have an impact. “When your costs go up and you don’t have any new revenue coming in to pay for it, things get a little snug,” he said.

One has to wonder what the state is accomplishing by moving taxpayer money around among its own agencies. Certainly it doesn’t seem to be in the state’s best interest for the Department of Administration to raise rates to the point where agencies increasingly leave state-owned buildings to lease more affordable space from the private sector.

Perhaps the end game for the state is to be rid of as much real estate as possible. But in the short-term, it seems prudent for the state to keep its rents more competitive, especially for its own agencies, and its buildings as full as possible.