State leases deserve a look

Inter Lake editorial

The same conflict rolls around every few years, when state lease properties are reappraised, but this time leaseholders are more riled than ever over fee increases that do seem excessive.

To the state's credit, it appears that Department of Natural Resources and Conservation officials are fully aware of those sentiments and steps are being taken to mitigate the damage. Hopefully, an equitable outcome can be reached.

Otherwise, the state is probably in for a fight, since the leaseholders have been organizing in an unprecedented way for a legal challenge.

The state Land Board, made up of Montana's top elected office holders, will likely consider ways of adjusting appraisals that have largely driven significant fee increases on 764 state lease properties, many of which are held by retirees with fixed incomes.

One such leaseholder, for example, has seen his annual fee jump from $1,800 seven years ago to $7,200 a year, and he expects it to climb into the $10,000 to $12,000 range within five years. Those are some pretty steep increases.

Understandably, the leaseholders are mightily upset that the most recent appraisals are derived from peak market values that do not reflect recession-driven market deflation that has occurred over the last couple years.

And they are making themselves heard. More than 100 people showed up for recent DNRC meetings on the topic in Seeley Lake and in Kalispell.

While the agency does have an obligation to maximize revenues from state school trust land, which includes the lease properties, it also must attempt to manage for long-term trust revenues. If lease properties are widely associated with unrealistic and unpredictably spiraling rates, finding willing long-term leaseholders may not be as easy as it has been in the past.