No progress on reservation fuel tax issue

WORLEY, Idaho – Indian tribal representatives had little to report Tuesday on possible solutions to a face-off with the state over sharing a cut of reservation fuel taxes. But the Idaho Council on Indian Affairs hopes it can reach an agreement by its next meeting in September.

Each tribe is working on its own proposal – the details remain confidential until completed – to allow the state a portion of the fuel tax collected at reservation gas stations.

“We have agreements in principle; it’s just working out the final details,” said council chairman Sen. Mike Jorgenson, R-Hayden Lake.

The council had hoped to have final proposals from the tribes at Tuesday’s meeting, but Jorgenson said last month’s state primary election as well as tribal elections ate up more time than anticipated.

“Frankly, I think a number of us were somewhat preoccupied or distracted,” Jorgenson said.

The fuel tax issue has been raging since lawmakers introduced House Bill 661, which aimed to seize the nearly $3.5 million in fuel taxes being collected every year at reservation gas stations. The bill died in committee on a tie vote, and the tribes have since been trying to negotiate an agreement with the state that will prevent similar legislation from being introduced next year.

Gov. Jim Risch attended the council’s last meeting in April, hoping to settle the issue that day. Risch expressed frustration when it didn’t happen.

“The governor has a very short time span,” Jorgenson said, eliciting chuckles from some council members.

Jorgenson and Rep. George Sayler, D-Coeur d’Alene, agreed they need a solution by the time the Legislature convenes again next January.

“I think if we don’t have something accomplished by then we will see legislation coming back,” said Sayler, who chairs the council’s subcommittee on the fuel tax issue.

Chief Allan, chairman of the Coeur d’Alene Tribe, said he’s still confused about what exactly the governor’s office is looking for in an agreement. Allan said he doesn’t feel what they’re doing – drafting proposals and giving them to Jorgenson to give to the governor – is true negotiation.

The Coeur d’Alene tribal council likely will pass a proposal that allows the tribe to continue collecting a fuel tax but designates a portion to the state, to be distributed by the tribe, he said. Risch suggested at the last meeting that the state collect the money and turn over a portion to the tribes, possibly a 50-50 split. Tribal leaders balked at the notion.

The Kootenai Tribe recognizes that “the state of Idaho has no authority to regulate taxes” on Indian reservations, said Russell Westerberg, the tribe’s lobbyist. But the tribe is cooperating to see that no ill feelings exist between it and the state, Westerberg said. The tribe doesn’t sell gas now but wants to keep its options open, he added.

The vast majority of the annual $3.5 million in tribal fuel tax comes from the Shoshone-Bannock Tribes, which has a large fuel business, selling gasoline and diesel fuel, on its reservation near Pocatello.

Allan said the money is not worth the exhaustive efforts the tribes and state are going through to find a compromise.

Jorgenson agreed. “It’s not even worth the time being here,” he said.

Jorgenson said the fuel tax issue isn’t a conflict in North Idaho – just in southeastern Idaho and in the state Tax Commission and state Transportation Department. He said “old biased feelings” against Indians might drive some of the conflict, as many of the positive things the tribes – notably the Coeur d’Alene Tribe – do for their communities go unnoticed.

“It’s almost embarrassing,” Jorgenson said.

But other lawmakers have argued that fuel tax collected in the state belongs to the state, and that by not collecting the tax paid by interstate truckers to the Shoshone-Bannock Tribes and giving it to the federal government, the state is violating the International Fuel Tax Agreement, which reimburses interstate truckers who pay tax on gas in Idaho but use it out of state.

Some say that the Shoshone-Bannocks’ diesel stations cause the state to violate the agreement because truckers will fill up on the reservation and be reimbursed by the state for taxes that never went to the state.