September 7, 1997 in Nation/World

Range Leases Called Giveaway Cottage Owners Unhappy With Proposed Increase

By The Spokesman-Review
 

The state of Idaho makes more money off 3,200 acres devoted to cottage sites than it does off nearly 2 million acres of grazing land.

Regardless, 596 cabin owners who lease land from the state could soon see their rents double or triple.

The 1,050 ranchers with state grazing leases will pay less next year for the same amount of forage.

Cabin owners will plead with the Land Board this week to reverse a decision to raise lease rates. But the Land Board has no immediate plans to review grazing lease rates, even though the return from those leases is less than one half of 1 percent of the land’s appraised value.

“It’s a huge giveaway, absolutely huge,” complains John Marvel, the Hailey architect who’s gained notoriety while trying to attain grazing leases for conservation purposes. “The issue is, are the school children well-served by this current system? No one could argue that they are.”

The income from state lands goes into the state’s school endowment fund. By law, the state is obligated to seek a maximum return on its land to benefit school children.

The fact that the state was getting only a 1 percent return from cabin leases - about $1.2 million - prompted the state’s top elected officials to raise the lease rates.

The increase to 2.5 percent of market value will boost income to the endowment fund by about $2 million a year, but could force middle-income cabin owners off their waterfront lots, some lessee’s worry.

“We were referred to as ‘fat cats’ by the Boise Statesman (newspaper),” said Chuck Hervey, president of the Payette Lake Cabin Owners Association. But, “the people who really have a lot of money and the really gorgeous leases on the lake are really in the minority.”

The average annual cabin lease now is $3,915. Many leases will double or triple. The state Department of Lands estimates that the new average lease rate at Priest Lake will be around $6,000 a year.

But more worrisome than the new lease rate is the inability to plan, Hervey said. In 1992, the Land Board decided to cap rents at 2.5 percent of the 1992 land value, and phase the increase in over 10 years. But since then, land values have increased up to 20 percent a year at Priest Lake while lease rates haven’t reached the 1992 goal.

So the Land Board, citing its obligation to school children, hiked the rents from 1 to 2.5 percent of the current appraised value.

“We have no stability,” Hervey said. “It makes it very difficult for people paying.”

Cabin owners don’t get much sympathy, however.

“The cottage sites are farther below market value than the grazing leases,” claimed Don Hobbs, former leasing bureau chief with the lands department. “My recommendation was that they (cabin leases) be between 4 and 4.5 percent of appraised value. So 2.5 percent is pretty conservative.”

Hobbs and others said it doesn’t make sense to compare cabin leases to grazing leases.

“When we issue a grazing lease, all we are issuing to them is the forage,” said current bureau chief Bryce Taylor. “It’s a different can of worms.”

Grazing leases are not exclusive leases, and ranchers generally are required to allow the public to use the land for recreation.

While cabin leases are based on the appraised value of the land, grazing leases are based on a rancher’s ability to pay.

The grazing fees are reached through a formula that accounts for cattle prices, the cost to produce cattle and private lease rates.

The fee this year is $4.58 per Animal Unit Month (the amount of forage a cow with a calf will eat in one month). In the early ‘70s, it was $4 per unit month, and next year it will be $4.16 per unit month.

By allowing farmers to use 1.8 million acres for grazing, Idaho made $980,000 this year, according to the Department of Lands.

J.R. Simplot, Idaho’s richest businessman and the second-largest leaseholder in the state, paid $38,693 to lease about 64,000 acres.

The biggest chunk of money came from the Idaho Citizens Grazing Association, which holds a lease for 82,676 acres that produces 25,510 unit months. The association, based in Soda Springs, Idaho, paid $116,836 this year for its lease.

North Idaho has 45 grazing leases. One is held by Idaho Forest Industries, which paid about $275 this year for 459 acres of state grazing land.

While defenders of the grazing fee formula contend that it’s based on what the market can bear, there’s at least some evidence that ranchers will pay more.

This week the Land Board is meeting to discuss problems with subletting of state grazing lands.

“I saw a sublease last year that was on our ground that was $14 (per unit month),” Taylor said. “Those kind of rates make you turn your head.”

Marvel says the way a unit month is calculated needs to be revised, as well as the whole fee formula.

Moreover, Marvel believes that the state needs to do a better job of advertising leases. When a lease expires, all the state is required to do is post the expired lease at the appropriate courthouse.

Leases are automatically awarded to the previous lessee, unless someone else wants it. Then the lease is sold at an auction.

“In Oklahoma, expiring grazing leases are advertised on television,” Marvel said. “In Idaho, nothing of the sort has ever happened because, in my opinion, the state has chosen to benefit public land ranchers at the expense of school children.”

As for himself, Marvel requests a list of expiring leases every year, but his attempts to lease land to protect it from overgrazing have been squelched by lawmakers.

In 1995, the Legislature passed a bill making it nearly impossible for someone to acquire a lease if they don’t intend to use it for grazing.

Ironically, the state Department of Fish and Game is one of the state’s largest grazing lease-holders. The agency leases almost 30,000 acres for wildlife habitat protection.

Taylor said the difference is that the wildlife agency picks lands for protection that the Department of Lands agrees has a “higher and better use” as wildlife habitat than as grazing land.

As much as Marvel complains about the grazing program, it doesn’t seem destined to change any time soon.

Although the grazing leases bring in less than cabin leases, Taylor said, Idaho remains one of the higher priced grazing states in the west. Federal lands are a bargain by comparison, at only $1.35 per unit month.

Land Board member and State Controller J.D. Williams said he doesn’t see any great need to revisit grazing fees.

As for the cabin owners, they think the Land Board’s asking too much.

“We want a special subcommittee to look at this one more time so we can come up with a more fair solution,” Hervey said. “We think what they’re doing is an illegal taking of our property rights.”

, DataTimes ILLUSTRATION: Graphic: Top 10 grazing lease-holders


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