Often it's a lease with option to buy at the end for a $1. Leasing is used by governments to do multi-year funding without bonding.
There is no chicanery involved per se with a lease, it just smooths the budget hit over the life time of the purchase. The time periods are usually shorter than a bond. It may not go against the governments bond ceiling which improves their credit rating, making money cheaper to borrow via lower interest rates.
From that you might think it could save the taxpayers money but it usually means they spend the savings elsewhere.
Summary: More government financial tricks for anyone interested.
People
The reason governments roll personal into the multi-year deal is so they can show smaller payrolls to the taxpayers. It doesn't lessen the overall size of government. It may reduce future debt in those states that run their own pensions as those costs are rolled in up front and paid off. This is why Dominion staff are all over election polling locations instead of state workers.
Disposal
As you noted, disposal is a big deal. If your department never owned it, you never have to go through the paperwork and process to legally dispose of it. These processes are cumbersome for the agency holding the assets and were designed for assets like automobiles, not technology, which depreciates more like supplies than assets.
Support & Multiyear spend
As you note, rolling in the support contract is another government trick.
Georgia's $100 million contract is probably mostly the non-hardware expenses, software licensing, upgrades, support and personal over the life of the contract and relatively little cost of hardware.
Governments generally can't pay bills for a future year in the current year. They are supposed to tax only what they need to run, no more. Any excess is supposed to back to the taxpayers and there have been court cases that forced this to happen.
Governments can purchase an extended warranty or a 3 or 5 year service contract up front. Sometimes they will do this up front year one. Sometimes they may even let the company bill you annually. They'll change in the middle too. They initially buy a 5 years contract calling it an extended warranty then they change it later to 3 years and use the credit from the 5 year contract to fund the maintenance for the year 2 purchases.
The Budget Hunger Games
Inside government, departments use this technique to preserve budget levels. A steady budget will tend to be steadily funded. A budget that goes up and down a lot will tend towards the lower side. Suddenly the department doesn't have the funds to run the department. Between departments in government, budgeting is Lord-of-The-Flies meets Nature-Bloody-in-tooth-and-claw.
The limit on multi-year spend is one of reasons why Government can't be "Run Like a Business." It does not mean they shouldn't borrow ideas from Business to run better, where appropriate, but the two are apples and frogs.
That’s really weird. Why? Who benefits from them being leased for $100miion?
We know it’s def not We, the People. That’s for sure
That’s exactly what this judge ordered after changing his mind.
They don’t have to impound them but they must immediately provide the contract to the Plaintiffs.
Did you see a video of him presenting to GA? Because I am pretty sure GA is one of the states that buys the machines.
OT: Leasing is common in Government.
Often it's a lease with option to buy at the end for a $1. Leasing is used by governments to do multi-year funding without bonding.
There is no chicanery involved per se with a lease, it just smooths the budget hit over the life time of the purchase. The time periods are usually shorter than a bond. It may not go against the governments bond ceiling which improves their credit rating, making money cheaper to borrow via lower interest rates.
From that you might think it could save the taxpayers money but it usually means they spend the savings elsewhere.
Summary: More government financial tricks for anyone interested.
People
The reason governments roll personal into the multi-year deal is so they can show smaller payrolls to the taxpayers. It doesn't lessen the overall size of government. It may reduce future debt in those states that run their own pensions as those costs are rolled in up front and paid off. This is why Dominion staff are all over election polling locations instead of state workers.
Disposal
As you noted, disposal is a big deal. If your department never owned it, you never have to go through the paperwork and process to legally dispose of it. These processes are cumbersome for the agency holding the assets and were designed for assets like automobiles, not technology, which depreciates more like supplies than assets.
Support & Multiyear spend
As you note, rolling in the support contract is another government trick.
Georgia's $100 million contract is probably mostly the non-hardware expenses, software licensing, upgrades, support and personal over the life of the contract and relatively little cost of hardware.
Governments generally can't pay bills for a future year in the current year. They are supposed to tax only what they need to run, no more. Any excess is supposed to back to the taxpayers and there have been court cases that forced this to happen.
Governments can purchase an extended warranty or a 3 or 5 year service contract up front. Sometimes they will do this up front year one. Sometimes they may even let the company bill you annually. They'll change in the middle too. They initially buy a 5 years contract calling it an extended warranty then they change it later to 3 years and use the credit from the 5 year contract to fund the maintenance for the year 2 purchases.
The Budget Hunger Games
Inside government, departments use this technique to preserve budget levels. A steady budget will tend to be steadily funded. A budget that goes up and down a lot will tend towards the lower side. Suddenly the department doesn't have the funds to run the department. Between departments in government, budgeting is Lord-of-The-Flies meets Nature-Bloody-in-tooth-and-claw.
The limit on multi-year spend is one of reasons why Government can't be "Run Like a Business." It does not mean they shouldn't borrow ideas from Business to run better, where appropriate, but the two are apples and frogs.
Completely makes sense. I would’ve never thought abt this and how gov’t budgets work. Thanks!!
Still think the $100 million for those machines is overpriced when considering how horribly corruptible they are.