The earnings from Idaho’s endowment trust lands and funds – which we oversee as the Land Board – totaled $330 million in fiscal year 2014, a record achievement that is relieving citizens of part of the cost of funding important functions of state government and putting Idahoans to work.
Millions of acres of state endowment trust lands and the funds created from the revenues they generate support Idaho’s public school system, higher education and a number of other Idaho institutions. This fiscal year we will distribute $52 million to public schools and other beneficiaries from our earnings. Another benefit is the economic activity that comes from Idahoans working on the lands, along with the indirect jobs that are created when the lands are put into production.
The Idaho Department of Lands (IDL) boosted gross land revenues to a 14-year high of $102 million while the Endowment Fund earned a huge 18.8-percent return – the second-highest return in the fund’s history – adding $267 million in investment earnings. That brought the total balance of the Endowment Fund to $1.7 billion in fiscal year 2014, which ended June 30.
We hit the mark through efficient management of our natural resources. A record 347 million board feet of timber was harvested, due in part to IDL foresters’ swift action to enable logging of trees damaged or killed by wildfire and insects. Millions of trees were replanted to perpetuate the long-term health of Idaho state forests. The Land Board also auctioned hundreds of state oil and gas leases in western Idaho, a sign there is continued interest from industry in developing Idaho’s natural gas resources. The record revenues even included close to $1 million in a single bonus bid in a unique lease auction for use of state lands to re-create Evel Knievel’s 1974 attempt to jump the Snake River Canyon near Twin Falls.
Also, while it had no immediate impact on earnings or revenues, dozens of cottage site lots worth $12 million at Payette Lake were auctioned for ownership, the first wave in accomplishing our plan to sell most of the 350-plus state endowment-owned lake lots over time. We are reviewing our investment strategy to determine where to reinvest the proceeds from the disposition of these lots.
These working lands not only improve Idaho through the distributions they provide to public schools and other beneficiaries. Endowment lands also are putting Idahoans to work. The economic activity brought about by the forest products professionals, ranchers, farmers, miners, oil and gas companies and others who pay Idaho to use these lands gives a boost to communities across the state.
We have been entrusted to manage endowment lands for the maximum long-term financial return. A significant investment in stocks and strong performance of fund managers brought Idaho into the top 10 percent of its public fund and endowment fund peers during the past three years. The 18.8-percent return in FY14 brought the fund’s annual average return to 14.7 percent during the past five years and 8.5 percent during the past 10 years.
Together with our state land managers and the fund managers who invest the revenues they work hard to generate, we’re showing Idahoans that active management of state endowment trust lands and prudent investment of financial assets benefit us all.
By the State Board of Land Commissioners: Governor C.L. “Butch” Otter, Secretary of State Ben Ysursa, Attorney General Lawrence Wasden, State Controller Brandon Woolf, and Superintendent of Public Instruction Tom Luna.