Traverse City Record-Eagle

January 10, 2013

Editorial: GT Band right to address taxation, equity


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---- — There's nothing new about governments that are immune from local taxation — such as the state of Michigan or the federal government — paying an annual fee instead of local property taxes.

There should be a similar arrangement between the Grand Traverse Band of Ottawa and Chippewa Indians and local townships where tribal-owned land has been put into federal trust status and is exempt from local taxes. A new initiative could help create a way to decide what that amount may be and how to go about it.

The band currently wants to place nearly 160 acres in Acme Township in trust, but local municipal officials are worried about revenue losses if the land goes off the tax rolls.

The two parcels are on the north side of M-72. The Grand Traverse Resort and Spa, owned by the band, owns one of the parcels. The Grand Traverse Band Economic Development Corporation owns the other. Lands in trust are owned by the federal government on behalf of tribal entities.

Concerns about losing local revenue are legitimate and are based on past experience. When the band built the Turtle Creek casino in Whitewater Township, that land and an adjacent parcel in Acme were put into trust, but with no agreement on lost property tax revenue. Some of the money the band hands out each year, based on its casino revenues, goes to the townships. The band has also invested many thousands in Whitewater infrastructure over the years.

It's only fair that the band pays its share of the cost of fire and police protection and other services provided by the county and township and other tax-supported entities, even if it's not legally obligated to do so. But deciding what that amount should be has been elusive. Fire and police protection isn't cheap, and costs must be shared; but determining what is equitable isn't easy. The Acme parcels the band now wants to place in trust generated roughly $19,500 in taxes in 2011.

A proposed 2008 agreement between the county, the township and the tribe, which was never completed, suggested the tribe pay for continued governmental services and lost tax revenue associated with lands in trust.

Tribal officials last month proposdd that the three units of government drop the 2008 agreement and instead create a committee to discuss possible solutions. Whitewater Township would like to join in.

That's a good first step. If the band wants to enlarge its holdings near the casino it must expect to work with local governments, including finding an equitable way to share in the costs of doing business.