BOISE – An ideological debate in Idaho over government competing with the private sector has prompted the state Land Board to begin updating 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 public endowment to make money for schools.
After pressure from some legislators who are working to limit the endowment’s ability to take on commercial real estate investments, the board voted unanimously Tuesday to revise its plan to reflect recent updates, such as the decision to dispose of many lakefront cottage sites, and to “clarify desirable types of land investments.”
Among other things, critics worry government could undercut fair market prices because of its tax-exempt status and potential ability to subsidize operations through tax dollars. However, lands officials said analysis of their leasing program shows rates are based on market factors.
“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. Otter said that one included a base payment, with the percentage on top – 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. In recent years, the board has been trying to diversify its holdings to avoid being dependent on one, often volatile, market sector.
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 when it purchases land in their jurisdictions. 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 would likely take a constitutional amendment.
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 in November.