How is it possible — from the standpoint of legality and/or (at the very least) fairness — for Indian reservation residents (both tribal members and lessees) to publicly vote on local property tax issues that, because of 100 percent property tax exemption by statute, they experience virtually no tax liability for payment given successful levy election passage?
Commentary by Bruce Elliott
How is it possible — from the standpoint of legality and/or (at the very least) fairness — for Indian reservation residents (both tribal members and lessees) to publicly vote on local property tax issues that, because of 100 percent property tax exemption by statute, they experience virtually no tax liability for payment given successful levy election passage?
Case in point: The vast majority of the 295 publicly-funded school districts in Washington State rely on periodic special levy elections, in which local school district residents opt to tax themselves, via voter-approved additional property taxes, to provide schools the additional maintenance and operating resources not otherwise funded.
In 2014, the La Conner School District, in western Skagit County in northwest Washington State, lost its first special levy election in the past 40 years. This was a consequence of/reaction to the Ninth Circuit’s recent “Great Wolf Lodge” decision that ruled counties could not collect property taxes on “improvements” situated on leased Indian reservation land. In Skagit County, this ruling dramatically affected 931 properties, principally in the Shelter Bay community situated on reservation land leased from the Swinomish tribe. Those 931 properties were stricken from the county tax rolls, causing a tax shift to the remaining properties within the school district boundaries, with an annual increase in taxes as much as 25 percent affecting those properties.
As noted, the voter response at the subsequent replacement special levy election proposed by the school district was negative for the first time in 40 years. By law, a school district is allowed one second attempt at levy passage for the ensuing year. In promoting that second attempt, the Swinomish tribe — whose reservation-based students are served by the La Conner district, but again, who have virtually zero property tax liability — went all-out in promoting levy election passage. Efforts included positive levy support in tribal communications, posting of “Vote Yes” signs by the scores throughout reservation housing and properties, and sponsoring “voting parties” for tribal members to get out the “yes” vote that included various “incentives” such as gifts and prizes to attendees! Is the latter even legal? In most circumstances, these would be termed bribes!
The school special levy election DID pass on the second attempt. Property owners continue to pay higher taxes due to the tax shift. And tribal members, as well as residents on land leased from the tribe, remain totally exempt from any property tax liability. How is this possible, legally, and at the very least, how is this situation considered fair?
Tribal Opportunity
As an adjunct to this situation, another egregious issue developed: When the 931 “improvements” were removed from the Skagit County tax rolls, the Swinomish saw an opportunity to collect equivalent property taxes themselves. The tribe immediately set about to create the “Swinomish Tax Authority”, and using the same property descriptions and assessed valuations as determined by the county, issued tax statements to the owners of the 931 properties situated on land leased from the tribe, principally in the Shelter Bay community. Except the tribe doesn’t call it a “property tax”; instead, they use the term “use and occupation” tax, though the entire basis and principle is based 100% on the county property tax model. However, there is virtually no taxpayer representation, no “voice” or say what so ever in how these monies paid to the tribe shall be used. Worse, these monies now collected by the tribe were initially voted upon to support local taxing districts (e.g., schools, libraries, hospitals, dike districts, etc.). In the case of the La Conner schools, the district would have collected approx. $780,000 in voter-approved special levy tax monies had the county collected property taxes. The Swinomish, however, chose to “contribute” only $400,000 of the $780,000 it is believed they collected, keeping $380,000 for themselves! This inequity has continued, unchallenged, in subsequent years.
Sovereignty or citizenship — which is it?
Indian tribes claim to be “sovereign nations” — a position established and supported by federal policy — yet individual tribal members are declared U.S. citizens (Indian Citizenship Act of 1924). These ideologue concepts appear to be in total conflict in that tribes claim “sovereignty” only when it suits their interests, otherwise they claim all the rights and protections of national citizenship. This becomes especially evident and troublesome in the case of political persuasion and support, especially financial. With the advent of increasing tribal wealth, principally through the benefits of the Indian Gaming Regulatory Act of 1988 (IGRA) and continuing federal “assistance” to the tune of $20-plus billion annually. (What ever happened to federal assessment of “self-sufficiency” and “economic opportunity” — the principal concepts IGRA was “sold” on?)
It has been nearly 30 years since IGRA became the law of the land. Of the 556 federally recognized tribes in the U.S., 220-plus tribes in 29 states own/operate 350 gaming enterprises that generate over $26.5 billion in revenues annually, or roughly $120-plus million per year, on average, per tribe. Sadly, the state of Washington sees very little of this money thanks to a highly questionable political decision made years ago.
Related: Tribes give big to Gregoire, avoid sharing casino cash
Washington politics, including the governorship, congressional representatives, and other elected officials, has been totally corrupted by tribal influence and financial “contributions” for decades. The Indian tribes, collectively, effectively “own” the politicians in this state; without exception, they will always support tribal interests first, at the expense of other constituents.
According to tribal data, Washington has 32 Class III casinos operated by 23 tribes, with more in the planning stages. Eight (i.e., one-quarter) of these 32 casinos are located in Skagit, Whatcom and Snohomish counties in northwest Washington. Most are housed in lavish structures that include not only expansive gaming areas, but also hotels, restaurants, spas, gas stations, entertainment halls, conference rooms, smoke shops, RV parks, golf courses, etc. Other than competing with each other, most Indian casinos operate as monopolies, tax-free, with no outside competition. Many of these Indian casinos are approaching 30 years of successful operations. Judging by the expansive size of their facilities, the scale of operations and apparent high volume of business, one has to assume they are substantially profitable, thus representing a fair share of the $120-million each Indian casino takes in on average.
According to available data, the federal government (i.e., the U.S. taxpayer) continues to contribute more than $20-billion per year to Indian tribes. See: $20 Billion: Total US Support for American Indians Included in this sum are recent grants of $500,000 each to two local tribes, each of which own/operate presumably successful casinos.
The question is, when, and by what means, does the federal government determine when a tribe has attained “self-sufficiency” and reduce/cut off the flow of federal monies?
Bruce Elliot lives in La Conner, WA and can be reached at 360-466-2759
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