The Idaho Supreme Court today overturned a lower-court ruling denying judicial confirmation for a lease-back arrangement on a downtown Boise convention center expansion, ruling instead that the lease doesn’t violate the Idaho Constitution’s debt restrictions. Justice Warren Jones’ opinion in Greater Boise Auditorium District vs. David Frazier was unanimous, with Justices Jim Jones and Roger Burdick concurring, and Justices Daniel Eismann and Joel Horton concurring in the result while endorsing a separate concurring opinion; you can read the full decision here.

Justice Warren Jones wrote, “The constitutional provision at issue here prevents governmental subdivisions from incurring ‘any indebtedness, or liability, in any manner, or for any purpose, exceeding in that year, the income and revenue provided for it for such year,’ without a super-majority vote of two thirds of qualified voters.”

But, he found that the lease-back arrangement didn’t commit the district for more than a year. Frazier contended the district was really purchasing real property and binding itself for the long term, and that if the arrangement were allowed, local governments in Idaho could circumvent the constitutional requirement for a vote of the people. But Jones wrote, “Drafting a contract that does not violate the constitutional provision is not circumventing it. It is simply seeking to comply with it.”

Numerous government entities filed amicus briefs siding with the auditorium district, saying that if 4th District Judge Lynn Norton’s ruling against the plan stood, it would inhibit a wide array of normal business practices for local governments in Idaho. Chris Meyer, attorney for GBAD, said, “It is hard to overstate the significance of this decision, at least to the world of municipal finance. … There are sighs of relief all over the state.”

Frazier said, “My big fear is that the right of citizens to weigh-in on public debt will forever be compromised by this ruling, opening the door to local governments to never seek voter approval for bonds, opting instead for ‘annual leases.’”