Cash-hungry U.S. states turn to Web to auction goods

By Tom Ryan

NEW YORK (Reuters) - U.S. municipalities, strapped for cash as the recession decimates revenues, are stepping up sales of everything from old police cars, helicopters and bicycles to confiscated jewelry and slot machines in an effort to reduce swollen deficits.

And municipalities that previously relied on old-fashioned auctions conducted in local parking lots are getting more sophisticated, turning to the online world as they seek to maximize their sales.

As many as 46 states are struggling with deficits, according to the Washington-based Center on Budget and Policy Priorities. And governments, which are required by law to close budget gaps, are being creative in seeking ways to meet the shortfall.

"Anything that we can dispose of that generates revenue definitely helps to reduce any deficit that we have in the budget," said Greg Spearman, director of purchasing for Tampa, Florida.

Tampa recently raised more than $300,000 from the sale of a 1978 Piper police airplane. The sale was conducted by auction on www.govdeals.com, a website founded by a former investment banker and two partners to help local governments maximize returns on unwanted assets.

Listings on the site have increased significantly in recent months and governments are looking deep into their closets for things to sell, according to Chief Executive Bill Angrick.

Agencies from Alabama, for example, sold about $3 million worth of goods in the first two months of 2009, compared with $9 million for 2007 and 2008 combined. Items included a batch of 27 confiscated bicycles sold by the city of Montgomery for $270.

Georgia agencies have chalked up $1.8 million in sales in the first two months of 2009, compared with sales of $9.1 million for all of 2008. Among the goods sold was a confiscated Yukon SL Crossbow sold by the town of Rome for $147.