Arrow-right Camera
News >  Nation/World

Idaho May Dump Lake Cabin Sites Land Board Suggests State Sell Out At Priest Lake Rather Than Raise Rent

If Al Lance had his way, the state of Idaho would start “auctioning off these damn cottage sites” at Priest and Payette lakes.

It looks like he may get his wish.

Attorney General Lance and other members of the state Land Board on Friday endorsed a sweeping plan to improve the financial return on state-owned lands.

Part of that plan would dump underperforming assets, especially cottage sites that have “very little potential for improvement in returns,” according to a 63-page task force report.

If the idea is approved by the Legislature, 355 sites at Priest Lake and 241 at Payette Lake could be sold.

The buildings on the Priest Lake cottage sites range from rustic cabins to lavish vacation homes. Some have stayed in the same families for generations. According to the Bonner County assessor’s office, 75 percent of the leaseholders are from Washington state.

State financial advisers have recommended the state get out of the leasing business, essentially because it has not had the political will to raise the lease rates high enough to make the enterprise viable.

Money from cabin leases goes into the state endowment fund, which supports public schools. The state Constitution requires that state land be managed to raise the maximum amount of money.

In 1992, the Land Board established a rental policy for lakefront lots that was supposed to be in effect for 10 years. The target rent was 2.5 percent of the assessed value of the land, but the agency collects only 1 percent or less on its waterfront investment.

The task force, appointed last October by Gov. Phil Batt and led by Boise investment executive Douglas Dorn, urges the liquidation of “underperforming assets” including grazing lands, croplands and especially cottage sites.

Lance serves with Batt, state Controller J.D. Williams, Secretary of State Pete Cenarrusa and state Schools Superintendent Anne Fox on the Land Board.

Batt has been frustrated by the cabin lease issue, but is worried the Legislature may not agree with the task force’s sweeping recommendations.

“My understanding is this has been received with less than great warmth by the Legislature,” Batt said Friday. “I can’t say I’m surprised by that. We’ve operated under one system for 100 years.”

The proposal would dramatically change the way earnings from the 2.5 million acres of trust land and the $585 million endowment fund it has produced over the years would be invested and distributed to public schools.

A key task force recommendation is that the real estate in the Land Trust, financial assets in the state Endowment Fund, and the cash flow from both be managed as a single portfolio.

Another key proposal is to redirect some revenue from the cash-cow sale of timber on state land, which now goes to the endowment fund for investment, to an “earnings reserve” account. That could provide a buffer against annual fluctuations in how much money goes to schools and other beneficiaries, the report said.

Endowment Fund Board member Gamewell Gantt III of Pocatello said he was skeptical of changing the tradition of putting all timber sales revenue - $53 million in the budget year that ended last June 30 - into the endowment fund. It has been such a dominant source of money for the fund that any reduction might hurt the board’s ability to keep increasing how much interest is distributed from the fund each year, Gantt said.

“My personal opinion is that you’re going too far, too fast,” he said.

Lance said the Legislature should be urged to at least approve a constitutional amendment for the November 1998 ballot during the current session. The promise of doing something to increase how much endowment money public schools get in the future might help ease the pain legislators are inflicting by paring back education funding now, he said.

“They are going to take a substantial amount of heat this year in terms of school funding. They are going to have to tell their constituents something,” Lance said. “We could provide them with some political cover.”

, DataTimes