Arizona’s flat 50% discount offered to private parties that lease state trust land for agriculture strays from best practices in comparable states and should be updated, a new audit says.The discount is offered to companies that make improvements to the land they rent. But at least two other states base the amount of a discount on the cost of the improvements made, and Arizona should consider following suit, the report from the Arizona Auditor General says.The report from the auditor calls on the Arizona State Land Department to keep better records of agricultural leases and reform how it assesses land values and sets rental rates. The department rents out land — proceeds from which benefit state programs like K-12 public education — based on rates not adjusted since 2006.The audit affirms reporting by The Arizona Republic in 2022 that found outdated appraisals and limited regulation hamstrung the state from monitoring water use and charging fair market rate on thousands of acres of land leased for agriculture.The coverage highlighted one Saudi Arabian company’s local affiliate, Fondomonte Arizona, whose sweetheart deals to rent trust land to grow alfalfa also allowed it to draw unchecked from a key water source. Several of the company’s leases in La Paz County have since been terminated by Democratic Arizona Gov. Katie Hobbs, whose administration has pledged to update groundwater management laws and preserve resources for Arizonans.The audit offers yet more evidence of past failures, Hobbs said in a statement Friday.”It’s clear from this report that the previous administration failed to take action to protect the Trust and the beneficiaries by allowing unchecked amounts of groundwater to be pumped on cheap leases that did not deliver market value to our state,” Hobbs said. “I will continue working to right the wrongs of the previous administration and do what’s best for the beneficiaries like our public schools.”Blaming the administration of former Republican Gov. Doug Ducey shortchanges a longstanding issue in the Grand Canyon State, one that is complicated by urban versus rural politics. Reform often stops at an impasse in the state Legislature.In 1997 — nearly 30 years ago — another report by the auditor general said the State Land Department needed to make changes in order to maximize revenues, pointing out that its lease rates and revenue per acre for agricultural trust land were some of the lowest in the western United States.The land was put in a trust by the federal governme …
