State board considers lease increases
The State Land Board is meeting Monday to consider ways to mitigate steep increases in fees for leaseholders on state trust lands.
"Due to extreme increases in the Department of Revenue 2009 appraisals for the 802 cabin-site lots, lease fees are slated to double, triple or quadruple for most leaseholders," according to a position paper from the Montana State Leaseholders Association, which was formed this year in direct response to the fee increases.
"Many of these leases have been held in the same family for generations and leaseholders have cleared the land, built roads and bridges and in other ways provided good stewardship and improved the value of this state land," the paper continues.
"These improvements, as well as any buildings or other structures, were built and paid for by lessees. Due to the exorbitant fees, many of these lessees will be forced to discontinue their leases."
The Land Board - made up of Gov. Brian Schweitzer, Attorney General Steve Bullock, State Auditor Monica Lindeen and Secretary of State Linda McCullogh - meets at 8:30 a.m. Monday at the state Capitol in Helena to address the issue.
Leaseholders will attend to testify about their situations and to promote one of five alternative remedies that have been proposed.
Members of the association worked with Department of Natural Resources and Conservation staff in developing an alternative that would freeze lease rates to allow time for a study to establish the market value for lease properties.
Under the current appraisal system, the Department of Revenue sets values based on comparable private properties that do not have the restrictions and responsibilities associated with lease properties.
The association, which has 250 member families, cites an informal survey indicating that if there is no relief and fees at least double, up to 67 percent of lease holders would leave their leases.
And that would leave the state in a potentially difficult position of trying to attract new lessees into a highly volatile fee structure.
There are 764 lease properties statewide, including 290 in Northwest Montana and 318 in the Seeley Lake area. There are 149 lots in the immediate Kalispell area, mostly on Echo, Rogers and McGregor lakes.
Doug and Shirley Stoner, who have had a lease for 15 years on Rogers Lake west of Kalispell, are among those who would be impacted by the lease increase.
Stoner said in July that his annual fee is set to increase from the current $2,800 to $8,250 by 2012, largely because of the most recent reappraisal.
That amount, he said, "takes half my retirement" income, and will force him to move his mobile home from the .41-acre lot, leaving his septic system and well behind.
John Owen acquired his lease property on Echo Lake east of Kalispell seven years ago. Initially it had an annual fee of $1,800 that has since gone up to $7,200 a year. With the latest reappraisal, Owen expected his fee to climb into the $10,000 to $12,000 range within five years.
Reporter Jim Mann may be reached at 758-4407 or by e-mail at jmann@dailyinterlake.com