Idaho to update state lands investment policy
BOISE - An ideological debate in Idaho over government competing with the private sector has prompted the state Land Board to begin crafting updates to its asset management plan for the state endowment.
But the board has no plans to stop doing what the state Constitution requires it to do: Manage the endowment to make money for schools.
After pressure from some legislators, who are working on legislation to try to limit the endowment’s ability to take on certain types of real estate investments, the board voted unanimously Tuesday to revise its plan to reflect recent updates, such as the decision dispose of many lakefront cottage sites, and to “clarify desirable types of land investments.”
Though board members continue to clash over the endowment’s purchase last year of a self-storage business, which is operated for the state by a contractor, all said they thought the updates were a good idea.
“I for one believe that clarification in our overall plan is probably appropriate, to help us focus our thoughts and our actions and also … educate the public and the Legislature about what we’re trying to accomplish,” said Attorney General Lawrence Wasden.
The board is chaired by the governor and includes the state Attorney General, Secretary of State, Controller and Superintendent of Public Instruction.
Gov. Butch Otter said he thought the self-storage purchase was the first time the Land Board had “changed the character of our position” from simply being a landlord, to being “dependent on … profits and loss.”
Deputy Lands Department Director Kathy Opp noted that there are other types of leases where the endowment gets a percentage of profits; the Tamarack Resort lease was one, she noted. Otter said that one included a base payment, with the percentage on top of that - and he’s comfortable with that arrangement. “Then you have a posture of being the landlord,” he said. “You’re not at risk.”
Much of Idaho’s endowment is timber land, from which the endowment sells timber to loggers. In recent years, the board has been trying to diversify its holdings to avoid being dependent on one, often volatile, market sector.
State Schools Superintendent Tom Luna said he’s concerned about impacts on local property taxes when the endowment purchases land in a particular county, city or school district; that property becoming publicly owned, and thus exempt from property taxes, would cause others in the same jurisdiction to pay more to make up the difference, he said.
Secretary of State Ben Ysursa noted, “There are more taxes than property tax - there’s income and sales taxes, and sometimes work on the endowment property impacts that area, too. … They go into the general fund, and a pretty high percentage goes to public schools.” He said, “You can’t discuss that in a vacuum. … You’ve got to look at the whole picture.”
Some lawmakers, including House Majority Leader Mike Moyle, R-Star, have suggested that the endowment should make payments in lieu of taxes to local governments.
But Otter said, “It’s been pointed out again and again, the Constitution prohibits us from doing that.” He said he was interested in exploring some type of “mechanism” to allow something along those lines, but that’d likely take a constitutional amendment.
Wasden noted that when the endowment buys property in one jurisdiction, it typically sells or trades away property in another jurisdiction - so any property tax impact in one is balanced by the opposite impact in the other.
The Lands Department will work on the updates to the asset management plan, coordinating with all the Land Board members and their staffs, and present them to the board at its November meeting.