The Idaho Supreme Court could give its opinion on what rates the state should set for leasing state-owned lakefront property on two lakes in as little as three weeks or as long as four months. The court is being asked to rule on a decision by the Idaho Land Board to increase lease rates at Payette Lake and Priest Lake because Attorney General Lawrence Wasden filed documents with the court saying those increases are unconstitutionally low. Raising the price of leasing lakefront property could bring in more money for public schools and other state programs, but it could also drive away current leaseholders.
Last week, the court sent out a request to the Land Board and the Idaho Department of Lands (IDL) for their sides of the argument. Those documents are due back on April 8. After the court gets that response, it’s hard to pin down when the justices will reach a verdict. “Once that comes in, there is no active timeline,” said Steve Kenyon, the clerk for the Idaho Supreme Court and Court of Appeals. He said the five justices on the court could issue a decision within three weeks, or could ask for oral arguments from Wasden and other Land Board members, including Gov. Butch Otter, Secretary of State Ben Ysursa, and Superintendent of Public Instruction Tom Luna. All three Land Board members voted for the proposed increases that Ysursa said could bring in an additional $2.3 million a year.
If the court wants a hearing on the matter, it would delay a decision. “We’re booked all the way through August right now,” Kenyon said, though he added the court could possibly make room in its schedule. The Land Board is also running up against an April 30 deadline for current lakefront leaseholders to renew their leases.
The lands department is contracting an attorney to put together a common response from the Land Board, according to IDL Director George Bacon. He said he’s never seen a similar situation where one member of the Land Board, in this case Wasden, files a legal challenge over a board decision. “It’s new to my experience,” he said.
The dispute centers on the $25 million in state lands on Priest Lake and Payette Lake. The Land Board, including Wasden, has voted to freeze lease rates for the land for several years. Money from the leases and other state land goes to endowments supporting public schools, higher education, state hospitals, and other programs. The Idaho Constitution requires the Land Board to consider only the long-term maximum gain to institutions like schools when dealing with state lands, but the lakefront land has been less profitable than other land used for timber, grazing or other purposes.
A plan approved by Otter, Luna, and Ysursa at a March Land Board meeting would raise rates gradually during the next five years to 4 percent of the land’s value over a 10-year average. The current rate is closer to 2 percent, thanks to the rate freezes. Wasden and State Controller Donna Jones voted against the plan, saying they wanted higher increases. Wasden has in the past called for a lease rate at 6 percent of land value, saying that is the market rate for rent. Current leaseholders also opposed the Land Board’s increases, saying they were too high and could ruin the market for selling their leases to other buyers.
The lakefront leases differ from standard property leases because while the state owns the land, the leaseholder owns the cottage or house sitting on the land. The Land Board has said it wants to change that situation, by either selling the land or unifying the dirt with the structure on top of it. Otter has called the lakefront cabins a headache and Luna has said he wants to sell the land, though Wasden said unification, one way or another, is key.
Watch video of Wasden and Ysursa after the Land Board's March decision on lease rates here.