Timber Company, County Decry Idaho Land Buying Splurge

BOISE, Idaho (AP) — Idaho's plan to buy timberland unfairly competes with private businesses and takes away tax revenue from local governments, a timber company and a northern Idaho county said Tuesday.

Keith Williams of the Stimson Lumber Company told Republican Gov. Brad Little and four other statewide-elected officials on the Idaho Land Board that the state buying timberland is a bad idea.

Idaho has been selling hundreds of residential home sites as well as commercial real estate as it gets out of leasing properties. The state expects to bank about $180 million that a financial adviser says should be used to buy timberland and farmland.

"The scale of the Land Board's reinvestment strategy just, quite simply, doesn't work for Stimson," Williams told the board. "It pits the state in direct competition with the private sector. Why does the state want to compete with the private sector at all?"

Board members listened but didn't comment.

Idaho received 3.6 million acres (1.5 million hectares) of endowment land at statehood in 1890. Over the years, it has sold about 33 percent and now has about 2.4 million acres (987,000 hectares) remaining.

The Land Board manages that remaining land to make money mainly for public schools, mostly through timber sales. The Land Board is constitutionally mandated to get the greatest return on that land and other investments over the long run.

Besides land assets, the state also has investments that fluctuate with the stock market.

"Reinvestment of (the) proceeds into other land assets — timberland and farmland — provide a buffer against the volatility of the financial investments in the stock market," State Forester David Groeschl told the Land Board in explaining the state's reinvestment strategy with money from residential sites and commercial properties.

Williams said that's a problem for his company because sawmills drive the company's investment strategy, and that the company only invests in sawmills when it has bought enough timberland to sustain them. He said the state has bought parcels the company wanted to purchase.

Williams said the Portland, Oregon-based company entered Idaho in 1996 after closing six mills in other states as changing attitudes toward logging limited harvest. The company now owns 164,000 acres (66,000 hectares) of timberland in Idaho with three sawmills located in Priest River, Plummer and St. Maries, employing about 285 workers.

Stimson said it's difficult for the company to compete with Idaho when buying land because the state doesn't pay property taxes and can buy land with a smaller return on investment.

Benewah County Commissioner Phil Lambert told board members that the Land Board in the last two years has purchased 15,000 acres (6,000 hectares) of timberland in his county.

"That immediately comes off the tax rolls," he said. "That has some short-term ramifications and some long-term ramifications that are very detrimental to county health."

He said other northern Idaho counties feel the same way.