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Doubts loom over Mohawk tax talks

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ALBANY, N.Y. - As the St. Regis Mohawk tribal council negotiates a sales
tax deal with New York state Gov. George Pataki, it has one overriding
question to answer to the Akwesasne community and to Indian country - can
you trust the state?

Tribal chiefs returned to the upstate St. Regis reservation Feb. 2 with a
signed land claims settlement and a framework for a trade agreement, but
their first task was to reassure the community that the trade talks (a
euphemism for "sales tax deal") would be a genuine negotiation. Language
published by the governor and the chiefs seemed on its face to be highly
one-sided: and not in favor of the tribe.

The framework of the trade deal is to give up the fight over sales taxes at
the off-reservation casino St. Regis has been trying to launch in the
Catskills, in return for a state "hands-off" of the Akwesasne territory in
remote northern New York.

The Mohawk chiefs can argue that the casino will be far from their historic
territory; and that the market, a day-trip from New York City, will be so
lucrative it would buy off the state from the slim revenue pickings on the
reservation. Since much of the state Legislature's public argument for
attempting to force tax collection on the reservation has been based on the
alleged loss of state revenue, the chiefs might hope this concession would
seriously reduce the heat.

(Legislators' estimates of revenue lost through reservation sales to
non-Indians have been grossly exaggerated, failing to consider that no
non-Indian would shop on the reservation without the tax break incentive
but the money to be made from shopping, gas sales and the like at a casino
near New York City is substantial.)

But there is a broader danger to this concession. The Catskills casino
sites would still be land held in trust for the tribes by the U.S.
government; in short, part of Indian country. The legal status would be the
same as that of reservation territory. What is there to prevent the opening
wedge of taxation on these outposts from very quickly being used to destroy
resistance at the heart of these tribal lands?

The framework that the chiefs brought back from Albany is not reassuring.
In return for the concession at the casino, the state promised to "take
into account" the existing St. Regis framework of business licensing and
price regulation, which for one thing keeps gasoline on the reservation
from selling more than 10 cents below the region's prevailing price. In
other words, as long as the tribal government doesn't change its
regulations, the state won't threaten to collect taxes. This deal certainly
sounds like a limit on tribal self-government, even in its narrowest
definition, if not like outright extortion.

And what kind of promise is "take into account?" What kind of formal
agreement or legal language would codify this promise?

Pataki told the chiefs he would submit a bill that would ratify the land
settlement with them and four other tribes. According to a Feb. 3 release
from the governor's office, it would also include a tax deal for all of the
tribal casinos in the Catskills, which Pataki wants to increase to five
instead of the already-legislated three. There are two problems:

First, the provision, as described in the press release, seems to foreclose
on the terms the Mohawks hope to negotiate in their trade agreement. Tribes
with Catskills casinos will have to agree to collect and remit state and
local taxes on sales to "non-members of the tribe or nation" - not just at
the casino but on all tribal land, if we read it right - "or,
alternatively, to enter into a price or tax parity or trade agreement
between the state and tribal government."

Is the state saying the result of a trade agreement has to be price or tax
parity? Then what is the point of negotiating?

But the second problem is that we don't at this writing know what the state
is really going to be saying. Assembly Speaker Sheldon Silver has made it
clear that he will have a hand in drafting the final version. He has
already focused on the tax issue, which he calls "the Assembly's
long-standing concern over unpaid, uncollected excise and sales tax
revenues on sales to non-Native American consumers on or through Native
American reservations." Legislative committees are already scheduling a
series of hearings around the state.

To put all this in quick perspective, Pataki already made a deal on this
issue back in 1997. The state at the time was trying to tax retail sales on
reservations, taking advantage of a questionable U.S. Supreme Court
decision. The only people not subject to state taxes, it said, would be
tribal members.

Although some leaders acquiesced (including some self-proclaimed hardcore
traditionalists), two tribes held out - the Seneca and the state-recognized
Unkechaug of Long Island. Their resistance sparked a grassroots revolt.
Faced with spreading violence, both by and against the state police, Pataki
suspended tax collection and, in a dramatic speech, promised to respect
tribal sovereignty.

Since then, the state has been whittling away at that promise. His chief
negotiator, John O'Mara, kept raising the subject of taxation in the
context of land claims and casino deals, backing off in the face of
determined resistance from the Seneca, but picking off the out-of-state
tribes trying to buy their way back to the New York gaming market. The
result has been a patchwork of compacts and agreements, most of which
totally sold out the struggle of native New York Natives. The Mohawk deal
falls somewhere in between.

This constant pressure hasn't simply been a drive for state revenue.
Non-Indian convenience stores and gas stations, one of the narrowest of
narrow special interests, have built up a determined lobby. They have
played on a widespread anti-tribal sentiment that derives from a whole
range of economic and psychological factors. Partial concessions from the
tribes are not likely to make this pressure go away.

Perhaps the real question for the Mohawk leadership should be, "What makes
you think you could trust the state, anyway?"