Tribe’s Sales Tax Bill Dies Despite Compromise, Proposal Fails For Third Time

A compromise bill to give the Kootenai Indian Tribe a cut of state sales tax money died Wednesday in the Senate.

The bill was backed by the tribe and Bonners Ferry businessmen who opposed the tribe’s earlier bid for a sales tax exemption.

But several senators said the proposal was nothing more than a handout to the tribe and rejected it.

“We are not that disappointed about it,” said Tribal Chairman Velma Bahe. “It wasn’t the original bill we went in with and we weren’t that happy about the compromise.”

This was the third year the tribe has failed in its fight for a sales tax exemption. Each proposal was fervently fought by Bonners Ferry businessmen.

“I really don’t know if we will try again,” Bahe said. “We have done all compromising and these promises of a cooperative relationship between the tribe and government always seem to fall through.”

The tribe had originally sought a sales tax exemption for a new business. But the local business community objected, saying the tribe would gain an unfair business advantage. After more than a year of negotiation, Sen. Tim Tucker, D-Porthill, brokered a last-minute compromise between the two that would have simply given the tribe a portion of the county’s sales tax proceeds if they lose the right to have gambling machines at their successful Kootenai River Inn.

But when that bill came up for crucial amendments on the Senate floor last week, several senators objected to it as mere “welfare.”

Sen. Jerry Thorne, R-Nampa, chairman of the Senate Local Government and Taxation Committee, asked Wednesday that the bill be returned to his committee.

“I am very disappointed about this,” Thorne said as he made the request. “I hope each of you will give some thought, this off-season, as to how we might help them and get back to me next year if you have a better idea.”

The group of Bonners Ferry residents and businessmen who agreed to back the compromise were perplexed at the bill’s demise.

“I would have rather seen a resolution to the whole thing so we don’t have to deal with this year after year,” said Ron Smith, a spokesman for the group.

“What is interesting, is the Senate seems to be saying the state of Idaho is not willing to just give the tribe $400,000 a year. So maybe this is closure. The decision by the Senate might prevent the tribe from coming back with something next year.”

The bill was returned to the committee by unanimous consent of the Senate.

Idaho promised Indian tribes it would help them with economic development when it banned tribal casino gaming three years ago. The Kootenai Tribe went ahead with plans for a business project, initially a grocery store, as part of its effort to work toward self-sufficiency. But local merchants have succeeded in blocking the tribe’s plans repeatedly.

Last year, the Legislature named an interim committee to work out a deal. The committee finally settled on a bill that put restrictions on the tribe’s proposed business, but the businessmen all opposed it. The restrictions included: The tribe would collect a sales tax equal to the state’s; it would be only a landlord, leasing the business to a non-tribal operator, and the measure wouldn’t take effect until the tribe lost the right to run its profitable gambling machines.

The businessmen hired a lobbyist and rallied supporters to fight the bill, saying they still thought the tribe would have an unfair business advantage.

The last-minute compromise bill sought to give the tribe about $400,000 per year from sales taxes once they lose their gambling. That’s roughly the sales tax the tribe would have collected from a successful grocery store.

But a drafting error said the tribe would get 1 percent of the county’s sales tax collections. To add up to $400,000, it needed to say 20 percent.

When the Senate wouldn’t agree to the amendment to 20 percent, the bill became worthless, Tucker said.

He said dejectedly, “I think we’re worse off than when we started. When we started there was something fresh in the legislators’ minds that they had agreed to do something for those tribes … It’s difficult to re-educate the Legislature on what its moral obligations are.”

, DataTimes