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Editorial: Idaho must find answers to lake lease problem

The headache over lease rates on Idaho’s Priest and Payette lakes has lasted too long already, but it will continue following a disappointing ruling on Wednesday by the state Supreme Court.

Attorney General Lawrence Wasden had sued the state Land Board, on which he sits, over a policy adopted last spring that ignores both constitutional and statutory requirements to charge tenants market rates in order to derive the highest possible return for Idaho’s schools. Schools, by the way, that suffered unprecedented state funding cuts last year.

Rebuffed by the Supreme Court, which he asked to prohibit the new formula, Wasden says he’ll take the matter up in district court and litigate it from a fresh start. Under the circumstances, that’s the right move, although this issue may never be satisfactorily resolved until the state addresses the odd mixed-ownership structure at the heart of the problem.

The state of Idaho’s endowment lands include 355 parcels at Priest Lake and 167 at Payette Lake. Those parcels are leased to private tenants, some of whose families have rented and used those same lands for generations. Many have built their own cabins on the state-owned land.

What happens if a tenant decides against renewing the lease when the rent goes up? What happens to the privately owned cabin?

That’s part of the political dilemma that arose when the real estate market in North Idaho came to a fast boil in the 1990s, forcing the state to raise lease amounts sharply in a losing battle to keep up. Sensitive to the impact on lease holders, the state Land Board resorted to deferrals, freezes and other methods for easing the public relations pressures – but at the expense of fiduciary responsibilities that Wasden insists should be the top priority.

There’s no convenient way to satisfy everyone. Leases that once cost families a few bucks a year now go for thousands, but that’s still well below where the constitution’s market-rate expectations would put them.

Last March, the Land Board, by a 3-2 majority that didn’t include Wasden, approved a complicated formula that includes rolling averages and a five-year phase-in. Nobody claims it would meet the market-rate rental requirement set by law, but they rationalize that the lease rates have never been high enough to do that. That’s a pretty weak argument to explain away a constitutional problem.

A Land Board lawyer even argued that the mixed-ownership complication may make it impossible to set market rates for state-owned land on which privately owned cabins sit.

Which raises a key question: Should the state even be in this business? No, Idaho should find a way to consolidate the land and cabin ownerships or, better yet, swap the lake holdings for other properties that lend themselves to more conventional management.

Indeed the Land Board ordered a study of that challenge last spring. Once the report is out, the board should follow up on any reasonable strategies for ending this headache.

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