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Picking Sides

By Marty Trillhaase

JEERS … to Idaho schools Superintendent Tom Luna. Last week he persuaded the Idaho Land Board to drain an extra $22 million from an endowment reserve account to soften the budget hit on public schools. This week, he derailed pumping more money into it.

At issue are the 521 cottage sites Idaho leases as vacation homes at Payette and Priest lakes. The state collects $4.3 million in rent, a return of only 1.7 percent on a $252 million asset. Idaho’s constitution requires this rental money be paid to the public schools, Lewis-Clark State College and Idaho State University.

Consultants Terry L. Anderson and Reed Watson say Idaho should be getting anywhere from 5 percent to 9 percent, which is what neighboring states charge for similar properties. Even the Parks and Recreation Department gets 3.75 percent return on its cottage sites at Heyburn Lake.

Along with Secretary of State Ben Ysursa and Gov. C. L. (Butch) Otter, Luna initially supported a plan to bring rents up to a rolling average of 4 percent. Because of the phase-in, rents would have risen only to 2.6 percent, however.

Attorney General Lawrence Wasden – who last year authored an opinion reminding the Land Board of its constitutional duty to get the maximum return on those cabin sites – thought the proposal inadequate and opposed it. Controller Donna Jones was non-committal.

Then Luna yanked his support during Tuesday’s Land Board meeting, arguing he needed more time to study so-called premium rents. Because state rents are so far below market rates, purchasers of the leases are willing to pay additional money to obtain one. In effect, they are prepaying rent – but to the original lease-holder, not the state. Some $26 million changed hands from 78 recent lease transfers. Only 10 percent of this money went to the public schools, LCSC and ISU. Lease-holders pocketed the rest.

When Luna and the Land Board settle this issue, will the schools, LCSC and ISU win – or will the politicians side with the special interests?

Stay tuned.

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