April 19, 2007 in Idaho

Counties protest tax shift

By The Spokesman-Review
 

Tax exempt

Indian trust lands are tax exempt and held by the federal government on behalf of tribal governments or individuals.

Kootenai and Benewah counties are objecting to the Coeur d’Alene Tribe’s request to remove nearly 2,810 acres from the tax rolls.

The Kootenai County commission said the annual tax loss would total $28,560 while neighboring Benewah County claims it could lose $25,000 annually, which could “quickly cripple, if not bankrupt” the rural county with an already small tax base.

In separate letters to the Bureau of Indian Affairs, both county commissions call the tribe “wealthy” and accuse it of trying to “avoid paying property taxes.”

The position incensed Sen. Mike Jorgenson, R-Hayden Lake, who is the chairman of the Idaho Council on Indian Affairs. He argues Kootenai County is focusing on a few dollars while missing the bigger economic impact the tribe contributes.

A recent study by the University of Idaho shows that the regional impact of wages, purchases and payments made by the tribe is $250 million annually, including the ripple effect of that money in rural communities.

Jorgenson said it’s especially astounding in light of last week’s announcement that the Berg Companies, in which the tribe is a majority stockholder, plans to build a new plant in Post Falls that would employ up to 150 workers. The Plummer-based company makes tents, trailers and other equipment for remote sites and is competing for several large military contracts that could steer millions of dollars worth of work to the companies.

“That’s tripping over dollars to pick up nickels and dimes,” Jorgenson said.

That stance, he said, will “absolutely” hurt the county’s relationship with the tribe.

Kootenai County Commission Chairman Rick Currie, also a Republican, said he hopes it won’t jeopardize the relationship with the tribe. Yet he said it’s the commission’s duty to keep a solid tax base.

Commissioner Todd Tondee, a Republican, agreed and said that this is likely just the start of the tribe’s requests to put lands in trust. He thought the county received two more requests Wednesday and that perhaps 30 more are coming soon.

Tondee said that the county has no problem exempting legitimate reservation land, but the tribe is allegedly buying up properties that have never been part of the reservation. He said it’s especially troublesome if the tribe plans to use the land for profit-making ventures.

“We’re trying to make it fair for all taxpayers,” he said.

Tribal spokesman Quanah Spencer declined to comment Wednesday, saying the tribe is still formulating a response.

The Coeur d’Alene Tribe is asking the federal government to put eight parcels of land totaling 515 1/2 acres in Kootenai County in trust.

The properties include land that adjoins the Cataldo Mission and the Circling Raven Golf Course.

Indian trust lands are tax-exempt and held by the federal government on behalf of tribal governments or individuals.

In Benewah County, the tribe is asking to put 21 parcels, totaling more than 2,400 acres, into trust.

The county is only objecting to about 2,290 acres of agricultural and timber lands that the tribe wants to use for wildlife conservation.

In an April 4 letter to the BIA, the Benewah Commission writes that the other properties, most of which are city lots in Plummer, are already used for core tribal government functions and are already tax-exempt even though they aren’t yet held in trust. The commission said putting these properties in trust won’t hurt the “impoverished” county’s property tax base.

The threat, the commission wrote, is taking away large expanses of agricultural and timber lands that don’t adjoin current tribal lands and serve no government functions. The commission argues that all these properties and their owners use county services ranging from roads, law enforcement, courts, EMS and solid waste. The tax revenue is needed to pay for these services.

It’s a nearly identical argument used by the Kootenai County Commission in its April 9 letter to the BIA.

The commission writes that the tribe’s move to put land into trust could likely reduce services to all residents.

Both counties state that the tribe’s casino revenue alone is many times greater than Kootenai County’s $53.4 million budget and Benewah County’s $4.7 million budget. And they argue the tribe has fewer people to provide services.

“The tribe is in a far better position to pay taxes on these parcels than the county is situated to absorb without serious detrimental impact,” the Kootenai County Commission wrote.

The tribe has been using casino revenues for years to buy back historic reservation lands. Jorgenson said not all of these lands are contiguous to the reservation, and it doesn’t make a difference where the property is located.

Last year the same counties decided to start assessing and taxing land owned by the Coeur d’Alene Tribe or individual tribal members that weren’t in trust but were still tax-exempt.

After reviewing about 150 properties, Kootenai County Assessor Mike McDowell said Wednesday that about 30 of the properties were added to the county tax rolls.

Treasurer Tom Malzahn said he won’t know until next week, when the taxes are calculated and the bills sent to property owners, how much revenue those properties generated for the county.

Benewah commissioners came under fire when they adopted the same policy.

McDowell, an elected official, said he didn’t take a stand on the issue and agreed to follow the commission’s directive. He said that the tribe has always been interested in reclaiming its lands and that the new requests to put property into trust aren’t in response to the county assessing taxes on non-trust lands.

“It’s just part of the tribe’s long-term objective,” McDowell said.

Commissioners from both counties based their decision to collect taxes on Indian property on a 1998 U.S. Supreme Court decision. In that case, the court ruled that Indian-owned land in Cass County, Minn., which was not put in trust, would be subject to property taxes.

Before that decision, Idaho deemed land owned by Indians exempt from property taxes and directed counties to grant tax exemptions to the owners.


Thoughts and opinions on this story? Click here to comment >>

Get stories like this in a free daily email