- Associated Press - Tuesday, January 20, 2015

MONTPELIER, Vt. (AP) - The state’s revenue from leasing land to seven Vermont ski resorts declined even as the value of the private land adjacent to it more than doubled during a 10-year period, according to a report released Tuesday.

The report by state Auditor Doug Hoffer says Vermont isn’t reaping the full benefit of a program started in 1942 that now includes leases on about 8,500 acres of state land.

“The leases were designed to capture a certain percentage of the primary revenue source, which 50 years ago was lift tickets,” the report said. “But, as the resorts have evolved, that revenue source has become one of many. The result is that revenues from lease payments have not kept pace with development as measured by the sale of goods and services, property values, and revenues from excise taxes.”

The report says that inflation-adjusted lease payments to the state declined by 14 percent between 2003 and 2013, but property near the ski areas increased in value by about 150 percent, and meals, alcohol and room taxes have increased by between 40 percent and 61 percent.

The report also says the leases are not consistent and the lack of uniformity has produced a system that is difficult to administer. And when the state negotiated the lease agreements, “it made a crucial error by not stipulating regular opportunities to update the agreements,” which the federal government does with its ski area leases.

In a letter to lawmakers, Hoffer says he hopes the report, considered a non-audit inquiry, “will stimulate a discussion about these issues, improve the program’s uniformity, and find ways to make better use of taxpayer dollars.”

Michael Synder, the commissioner of the Vermont Department of Forest Parks and Recreation, said his department had been working for some time with Hoffer’s office as the report was prepared.

He said they welcomed the scrutiny and he was relieved the report found no major problems.

“In fact, the problems, and being outdated and inconsistent, that’s all because they were really old,” Snyder said. “It’s not surprising, they were long-term leases and they were put into effect over a period of time.”

Snyder said he’d like to get more money from the leases.

“I don’t have the authority to say we’re just going to tear those up and make new ones,” he said.

Parker Riehle, the president of the Vermont Ski Areas Association, said the leases in their current form are “a tremendous economic benefit to the state.”

He said the lease payments are calculated based on all the economic activity that takes place on state land. And the state benefits greatly from economic activity at ski areas that are not on leased land.

“These leases have served the state very well in their current form,” Riehle said.

He said the lease arrangements have also led to the preservation of land and wildlife.

The state leases land to seven ski areas: Jay Peak, Burke, Smugglers Notch, Stowe, Killington, Okemo and Bromley, whose management signed the first lease in 1942.

Much of the resorts are on private property adjacent to the leased land. Between 2003 and 2013 the value of the private property grew by 150 percent.

The lease payments go the Forest Parks Revolving Fund, the largest contributor to the Parks Division of the Department of Forest Parks and Recreation. In the last 12 years the lease revenues have dropped from 41 percent of the division’s expenditures to 32 percent.

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