WINDOW ROCK, Ariz. - Navajo Nation President Joe Shirley has a bold plan that could bring 5,000 new jobs to the Navajo Nation in the coming years and jump-start an economy where studies show that almost 70 percent of Navajo paychecks are spent in nearby border towns.
"Money that has historically been spent in border towns will be spent on Navajoland," President Shirley said about his proposal, now backed by 90 of 110 reservation communities.
President Shirley is proposing six bond finance packages totaling $500 million that would be paid back over a standard 30-year period. The six measures will fund 265 backlogged capital improvement projects, seven one-stop-shop governmental complexes for public safety, judicial and social services complexes, economic development projects that would bring "big box" stores of the likes of Wal-Mart and Home Depot to Navajo along withtrauma systems, assisted living facilities and higher education scholarship opportunities.
All six proposals range from $186 million for the capital improvement projects to $30 million for education initiatives, $140 million for public safety/social services complexes, and $100 million for economic development activities, power line extensions and senior citizen centers.
If all six proposals are passed by the Navajo Nation Council, the package would bring $12 million in additional tribal tax revenues annually, plus 5,000 new jobs in the coming years.
Shirley's bond consultant George Cordova, who ran unsuccessfully for Congress, has presented the proposal to all Council committees, but the full 88-member Council did not act on the item during the recent Council winter session as the administration had hoped.
"We found that there was no true funded plan to improve the Navajo Nation," Shirley said about the plan he unveiled last fall. "There were stacks of pending CIP projects that were waiting for funding, some for more than 10 years. Is that progress? I don't think so," he said.
Shirley believes that by building an infrastructure for the private and public sector, you reduce the need to shop off the reservation. Hence, capturing a larger slice of the $1.5 billion a year Navajo payroll that is spent off the reservation and reducing the 50 - 70 percent unemployment rate.
One Navajo familiar with Shirley's bond proposal, who likened the plan to U.S. President Franklin Roosevelt's Great Depression plan, thinks the plan can work, "if there is a well thought out plan of action," said Al Henderson. Henderson headed the Navajo Division of Economic Development in the late 1980s, and now serves as tribal liaison for Northern Arizona University's Institute for Native Americans in Flagstaff, Ariz.
"When the U.S. economy crashed in 1929 President Roosevelt resolved to get the economy going again by convincing Congress to debut finance development," said Henderson. "The 'lets put people back to work now and we'll pay back later' approach then was successful only because of the full faith credit of the U.S. or more directly taxpayers. Herein is the dilemma of the $500 million proposal - how to pay off the debt."
"If we get the bonds at the present interest rate of 4.5 percent, the project will cost the Navajo Nation a little more than $30 million a year for 30 years, or $900 million with interest," said bond whiz Cordova, about repayment plans. "The repayment is no different than when one finances a home off the reservation and banks set payment for a 30-year period.
"We have solid options to pay back the bonds by using revenue, without putting the Navajo government in debt by tapping into government funding." The nation will repay the debt through one-third from new revenues, one-third from economic development and leases, and one-third from new taxes, of which over half will be paid off by Navajo Nation entities, Cordova said.
"Practically everyone around us, the federal government, every state, county, city and town engage in bond financing to fulfill their dreams and to help their people. Bond financing is not a new tool," Shirley said during his Jan. 26 State of the Navajo Nation address.
"Our vision requires us to make bold steps forward. The bond is necessary, putting our people first by funding programs that will advance the Navajo Nation, while improving the quality of life, creating jobs and increasing the Navajo Nation tax base, all while preserving our sovereignty, culture and way of life," he told members of the Council.
There's support and concern from tribal council members. "Generally speaking, it's a good proposal," said Speaker of the Council Lawrence T. Morgan, as he advised more work must be done to amend existing law to favor certain bond proposals and cautioned. "If we push it [the bond] too fast, we may not get that much out of [the benefits of the financing]. It's a worthwhile project. Let's not ignore it."
According to council member, Wallace Charley, the proposal does have value, "but we must look beyond the surface," said Charley, who was spurned by Shirley for the vice presidency. "The idea of building (big box) stores on the Navajo Nation to produce economic development does not make economic sense."