Fuel-tax deals go to Idaho Legislature

BOISE – Idaho Gov. Butch Otter will bring four fuel-tax agreements he negotiated with Idaho Indian tribes to lawmakers for their approval, even though there’s some legal question as to whether that’s required.

“Rather than having a debate about whether or not we should, I think the governor feels it’s important to share that with the Legislature, let them see what the final product is, the hard work and dedication and result of our efforts,” said David Hensley, legal counsel to the governor, “and in doing so, see if the Legislature can give us a positive response in the form of support.”

Last year, skeptical lawmakers passed legislation over tribal objections seeking to impose the state’s gas tax unilaterally on tribal fuel sales on reservations. But they included an out: Any tribe that signed a negotiated agreement with the governor by Dec. 1 would be exempt from the new law.

Otter reached agreements with all three Idaho tribes that operate gas stations – the Coeur d’Alenes, Nez Perce and Shoshone-Bannock Tribes – plus the Kootenai Tribe, which could get into the business in the future, in time to beat the deadline.

“We were able to negotiate in good faith,” said Coeur d’Alene Tribal Chairman Chief Allan. “It was a give and take on both sides.”

Each tribe committed to keep its tribal fuel tax equal to the state’s. That means if the state’s 25-cent-per-gallon tax rises, the tribes also will raise their taxes.

The tribes also committed to spend their fuel tax revenues on transportation needs, on and off the reservation, in partnership with other entities including federal and state agencies, counties, cities and highway districts.

Otter called it “a good agreement” that’s “fair to all.”

At least one lawmaker disagreed.

“I don’t see where we did any negotiation, I really don’t. They just spend the money any place they want to,” state Rep. Dick Harwood, R-St. Maries. “… They can purchase land, acquire land on any road. … It just seemed pretty open to me.”

Allan said he wasn’t surprised to hear that Harwood, who represents the district that includes the Coeur d’Alene Reservation, was critical.

“He probably will vote against it, but that’s to be expected, just because he always is taking a stance against the tribe,” Allan said.

Senate President Pro Tem Bob Geddes, R-Soda Springs, said the agreements are a good deal for both sides.

“The money they collect will be spent on the reservation to improve roads,” Geddes said, adding that each dollar the tribes spend is one the state or county won’t have to invest.

“I can’t think of a way that we could do it more fairly than that,” he said. “I think the Legislature will support it.”

Geddes said he thought any agreement had to be ratified by the Legislature. Last year’s legislation specified simply that the agreements must be signed by the governor and tribes by the Dec. 1 deadline.

In any case, “I think it’s good that the governor wants us to be involved and put our stamp of approval on it,” Geddes said.

The fuel-tax issue has been contentious for years, as the state repeatedly sought to tax reservation fuel sales but lost in court on constitutional grounds because states can’t tax sovereign Indian nations. After the last big court ruling, Idaho had to pay back millions in improperly collected fuel taxes, plus interest, to the Coeur d’Alene, Nez Perce and Shoshone-Bannock tribes.

Nevertheless, state lawmakers have pressed each year to try to impose the state’s gas tax on reservation fuel sales. They were emboldened most recently by a year-old U.S. Supreme Court decision in a Kansas case.

Allan said he’s glad the negotiations are done. “It’s going to be a good year,” he said. “We’ll be able to put the fuel tax behind us and focus on the people’s work and get things done.”