Yesterday, Idaho legislators concluded two days of hearings concerning restrictions on the types of property that the Idaho Land Board can purchase. Legislators will take the information from the hearings and write a proposal that provides updated regulation on how the Board manages the land held in the trust and how the Board can invest the money from land-sale proceeds.
Legislation could include limitations requiring the Land Board to invest land-sale proceeds in stocks and bonds, limit the types of property it can buy, and compensate local governments for the tax revenue they lose if the state acquires new properties for the land-trust. “There’s clearly an area where we can legislate,” said Representative Grant Burgoyne
The hearings came about because people were concerned about whether or not the government should be involved in commercial ventures. The State of Idaho had discreetly purchased a storage unit last fall. Because the Land Board is a state entity, it doesn’t pay income or property tax. Citizens are concerned that this will mean less tax money for city and county governments.
When Idaho received statehood in 1890, the federal government gave the state 3.6 million acres for an endowment trust. Income from the trust was earmarked to support public schools, universities, prisons, a state mental hospital, and veteran’s homes.
The Land Board was created to manage the trust and its funds. Members of the Board consist of the governor, the secretary of state, the attorney general, the state controller, and the superintendent of public instruction. The dispute concerns balancing the government’s role with the Land Board’s obligation to produce the best long-term financial returns for the beneficiaries.
During the 2011 session of the State’s legislature, House Bill 188 was introduced. It didn’t pass because the attorney general (who is a member of the Land Board) issued an opinion that the bill was unconstitutional. State representatives agree that the bill should be revised.
The interim committee listened to input from people on both sides of the question. Proponents supporting the purchase claim that diversification is imperative and they feel that diversification provides a steady stream of revenue even in a bad economy.
Opponents feel that the purchase is a perilous shift toward socialism with the government running businesses. “We just don’t want state government competing with private enterprise. That’s the fine line we have to work with,” said Monty Pearce, R-New Plymouth.
“Idaho lawmakers plan endowment limits after dustup.” The Chronicle; 30 August 2011.
“State Owns Tax-Exept Commercial Storage, Competes with Private Business.” The Boise Guardian; 19, October 2010.