Idaho, CdA Tribe reach deal on fuel taxes

BOISE – Idaho and the Coeur d’Alene Tribe have reached a historic agreement on fuel taxes that allows the tribe to charge its own gas tax – equal to the state’s tax – to fund transportation needs on and near its North Idaho reservation.

“We did it ourselves, cooperatively, civilly and without getting the courts involved,” said Gov. Butch Otter. “It’s a testament to the quality of our relationship with the Coeur d’Alene Tribe and to our shared willingness to work together, as sovereign governments, in the common interest of our people.”

Chief Allan, chairman of the Coeur d’Alene Tribe, said, “I think the agreement is excellent. I think everybody wins, and I think that’s great.”

The issue has been contentious for years, as the state has repeatedly sought to tax reservation fuel sales, but has lost repeatedly 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 unilaterally impose the state’s gas tax on reservation fuel sales, emboldened most recently by a year-old U.S. Supreme Court decision in a Kansas case. Last session, lawmakers passed – and Otter signed – legislation that would impose the state tax on any tribe that didn’t reach a negotiated agreement with the state over fuel taxes by Dec. 1.

The agreement with the Coeur d’Alenes easily beats that deadline, and Otter said he’s optimistic that agreements also can be reached in time with the Nez Perce and Shoshone-Bannock tribes, which also have tribal-owned gas stations on their reservations.

Under the new agreement between the state and the Coeur d’Alene Tribe, the tribe commits to raise its gas tax if the state raises its 25-cent-per-gallon tax, to keep them equal.

“They’re going to be competitive on the reservation,” Otter said.

It also calls for the tribe to spend its 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.

“We’ll have a joint effort,” Otter said. “It’s a good agreement, and it’s fair to all.”

Though some lawmakers last year scoffed at the idea that the state and tribes would reach negotiated agreements, leading lawmakers and Coeur d’Alene tribal leaders all were celebrating Tuesday as the agreement was signed in the governor’s office. Among those present for the ceremony were House Speaker Lawerence Denney, Idaho Indian Affairs Council Chairman Sen. Mike Jorgenson, R-Hayden Lake, state Tax Commission Chairman Royce Chigbrow and the majority of the Coeur d’Alene Tribal Council.

“The Coeur d’Alene Tribe always keeps its word, and I told everybody back during the session that we would keep our word,” Allan said. “I’m so happy to say that we kept our word and we’re moving forward, we’re moving on. Hopefully we can have a different working relationship for all sides, and get things done that benefit all of Idaho.”

The state generated $212 million from its state gas tax in 2006, while the Coeur d’Alenes collect an estimated $500,000 a year from their fuel tax.

“The numbers and the dollars are important, of course. But it’s just as important to me that this agreement represents a framework for cooperation on other issues,” Otter said. “I appreciate the work that tribal leaders have put into this and the spirit of collaboration that it represents.”