The Idaho State Land Board voted Tuesday to delay a decision on raising prices on leases of state lands on Payette Lake in McCall and Priest Lake in northern Idaho. However, the board agreed on proposals to work to sell off the property and to limit new leases to 10 years, rather than 35. The board will take up the issue of changing lease prices in its next meeting in March. Money earned from rent on the state land goes to support public schools, and some recent studies suggest that lakefront leaseholders may not be paying the market rate for the land.
“I’m not going to delay another month,” Gov. Butch Otter said before the unanimous vote to defer the decision on lease rates. Earnings from property on the two lakes generate about $4.3 million a year for the public school endowment. Secretary of State Ben Ysursa put forward a rate increase proposal he said would generate more than $6 million a year. The Land Board, which also includes Attorney General Lawrence Wasden, Controller Donna Jones, and Superintendent of Public Instruction Tom Luna, are mandated by the state constitution to get the most revenue possible out of state lands.
“My goal is to be fair to everyone,” Ysursa said. “That includes the endowment beneficiaries.” He chaired a subcommittee of the Land Board that investigated the lakefront cottage lease issue.
Leaseholders who filled the Land Board’s meeting room in Boise opposed portions of Ysursa’s proposed rate increases. “The proposal on the table jeopardizes the cash flow to the endowment,” said Jim Young, president of the Payette Lake Cabin Owners Association. He said most leaseholders on the lake would consider selling their leases if the Land Board approved Ysursa’s plan. “Ninety two percent of lessees are dissatisfied with the program and are looking to wash their hands of the whole thing,” he said. Young said he objected several parts of the proposal, including raising annual lease rates from 2.2 percent of the land’s appraised value to 4 percent with uncapped increased prices due to inflation or higher land values.
Attorney General Lawrence Wasden said lease rates should go up to 6 percent of the land’s value, because that would reach the market rate and provide the most money for schools. “The board cannot take into account matters other than the maximum long-term financial return to the trust beneficiaries,” he said.
Otter said that the Land Board has made it difficult for leaseholders during the past 30 years that the issue has been discussed. “We’ve created a lot of noise,” he said, adding that there needs to be a steady market for people looking to lease the state land on the two lakes. “They need to know that there’s a certain amount of predictability and stability.”
Ysursa said the Land Board is working on a deadline of April 30, which is when leaseholders with leases ending this year have to decide whether to renew their lease.
Ysursa and Luna gave their reactions to IdahoReporter.com after the Land Board meeting Tuesday.
Secretary of State Ben Ysursa discusses what will happen in the next month and how much the state can make from the lakefront state land.
Superintendent of Public Instruction Tom Luna discusses proposals to sell the lakefront state land.