Land grab or wise investment?

While Idahoans were busy at their barbecues, a scenario has been unfolding that would make it easier for officials to sell off large tracts of state land and to invest the money. Voters are being told this is a great idea to make more money for public schools.

We’re not so sure.

For it to happen, Idaho voters will have to approve two constitutional amendments—HJR 6 and HJR 8--that will be on the ballot in November. Also, Congress will have to remove 200-year-old restrictions on the sale or exchange of lands that were ceded to Idaho by the federal government when the state was admitted to the union.

The lands belong to the state’s school endowment. Idaho can already sell them, but only a little at a time. The new legislation would remove the annual limit. It would also repeal a 10-year limit on the term of leases on the land.

The amendments and the change in federal law also would allow Idaho to put proceeds from land sales into a "land bank." There the money would stay for two years until the state found suitable replacement land to buy. If it found no land, the money would go into the state’s permanent fund. Once there, it couldn’t be spent, only invested to earn interest.

Supposedly these changes will allow public officials to manage state lands better and earn more money for schools.

Idaho officials are embarrassed by the fact that the state earned just 7.9 percent on its very safe endowment investments. Utah and Oregon, on the other hand, earned a 22 percent rate of return, in part because of similar changes in law.

Supporters claim the state could realize between $20- and $30-million more annually if both restrictions on the sale of state land and investment of school funds are relaxed. Some experts say there is no downside to the changes.

We’re not so sure.

The whole scenario reminds us of a time when Ketchum allowed developers to pay a fee to the city instead of providing parking spaces. The plan was that the city’s piggy bank for parking would grow large enough for the city to buy pieces of land and to develop them into parking lots.

The way it worked out, land values increased fast and the parking fund increased slowly. The land values outstripped the city’s ability to buy land. The city was left with too little money and not enough parking.

If state officials aren’t wizards at real estate and investments, the state could see its school endowment lands shrink. If the stock market doesn’t perform well, the state could see large hunks of its cash disappear as well.

The Wood River Valley is full of folks who sold property thinking they had made big bucks, only to find out later that if they had held on to it, they would have been a lot better off. The state shouldn’t have to learn the same lesson.

By removing limitations on how much land it can sell and coupling that with removal of the 10-year limit on leases, the state could be opening itself up for an unprecedented land grab. If state officials haven’t noticed, the industrial and agricultural refugees from more urban states are coming here in droves looking for wide open spaces and cheaper land.

Idaho voters need a lot more information and more convincing arguments before they put precious state lands on the auction block—at any price.