The Idaho Land Board and its duties have raised concerns in recent years over whether the government should be involved with commercial properties, which opponents say puts the public sector in direct competition with private business.

The Land Board and the Idaho Department of Lands have said they are only doing what they are charged to do in the Idaho Constitution, which requires the Legislature to hold the lands in trust and imposes an additional restriction by requiring that they be managed to “secure the maximum long-term financial return” to the beneficiary.

Beneficiaries include K-12 public schools, the University of Idaho, five charitable institutions, teacher schools, the penitentiary, Capitol and State Hospital South. By far, the largest beneficiary is K-12.
Land Board members also point to Article 9, Section 8 of the Idaho Constitution that gives the board the sole authority to manage the state’s endowment assets, though the Legislature can provide some oversight and regulation.
During the 2012 legislative session, House Bill 495 was brought to limit the power of the Land Board. It passed the House floor 66-3, but failed to make it through the Senate Resources and Environment Committee.

The bill would have prevented the board from purchasing and running businesses. The bill also would have forced the board to sell a commercial storage rental facility it purchased for $2.7 million in August 2010.

Secretary of State Ben Ysursa, Idaho’s attorney general, Lawrence Wasden, and Controller Donna Jones said the bill was unconstitutional and it violated the state’s separation of powers clause. Superintendent of Public Instruction Tom Luna supported the legislation. Gov. Butch Otter, the fifth member of the Land Board, did not take a position on the legislation.

The Idaho Freedom Foundation, as part of a survey for candidates running in the May 15 primary, asked candidates if they support banning the Land Board or other government agencies from owning businesses that compete with the private sector.

Just four candidates were in opposition, 65 were in favor and eight were not sure. Some candidates chose not to answer.

The general sentiment from those in favor of the ban said that the government should never be in competition with the private sector and that free markets don’t have government interference.

Lori Shewmaker, a Republican candidate for the House in District 21, was outraged, saying that what the Land Board is doing is “completely immoral.” Shewmaker added, “Hitler would be proud of the Land Board. Government has a ‘leg up’ because they do not have to pay the taxes that private citizens and businesses do, therefore they will eliminate the competition price-wise. Eventually, if left unfettered, the state will own all the businesses and we will be completely communist/fascist, however you see fit to describe government control/ownership of industry and business. This is extremely alarming, and completely un-American.”

The four candidates who were opposed to a ban didn’t elaborate much on why, but Lary Larson, a Democrat running for a House seat in District 34, said he believes there is a place for the government to do such things. “The government should not make operating businesses a primary focus, but there are times and places where such an activity may have merit. A ban would prevent government from taking a course of action that may have positive benefits.”

Those who were unsure of the ban mostly felt that more information was needed, or that they would like to see the legislation before making a decision.

Rep. Marv Hagedorn, R-Meridian, who is currently running for state senator in District 14, believes the types of businesses need to be more clearly defined. “Being in timber sales or rental property is a private business. Lava Hot Springs was given to the state to be managed by the Land Board that is self sufficient. There are many issues with the definition of ‘owning and running a business that competes with the private sector’ as described. I do not think they (the Land Board) should be in the business of running a storage unit or cafe or bank, but we need to define these types of businesses clearly so we don't interfere with the businesses like timber sales that they are successful with.”

To date, IdahoReporter.com has published survey results on four issues including requiring a two-thirds approval in both houses of the Legislature for any tax increase, a two-third OK in both houses for an increase in fees, repealing or reforming urban renewal legislation in the state and the question of the state owning or controlling commercial properties in competition wit the private sector.

The issue drawing the most favorable votes from candidates is placing a limit on the state owning and/or operating commercial properties that compete with private enterprise.

To read the full surveys from candidates, click here.

Note: IdahoReporter.com is published by the Idaho Freedom Foundation.