Today, our nation faces a great challenge – the biggest global financial crisis of our lifetime. We are knee deep in depression-era levels of unemployment, bank closures, home foreclosures and auto bailouts. Indian country has not been spared either, whether in lost casino revenues, sudden restrictions on our credit, or watching our tribal investment funds plummet. And while this economic crisis is not of his making, President Barack Obama realizes that it is his to solve.
The president’s economic stimulus bill, the American Recovery and Reinvestment Act, is an unprecedented move to fix this crisis. Although it may be controversial, we can’t afford to miss the big picture – which is that the president and Congress have given Indian country an unprecedented and epic opportunity to reshape our destiny.
For generations, we have sought to bring prosperity back to our people. And while gaming has brought fortune to a few tribes, the reality is that for the most part, our reservation economies are still far behind even the worst of our nation’s cities. Even a national 10 percent unemployment rate is nothing compared to 50 percent – the average for Indian reservations in the Great Plains.
But ending poverty and unemployment and creating prosperity requires infrastructure. In other words, the basic building blocks of a healthy economy require wires to deliver electricity, broadband and telephone service, pipes to deliver water and sewer, as well as safe roads, smart buildings and public transportation. Without these fundamental tools, we simply cannot create the conditions to build and attract business.
This is what is so important about the American Recovery and Reinvestment Act – it gives Indian country an opportunity to invest and create on a level we simply have never seen before.
For decades we have depended on the federal government or states to handle water and sewer, electricity, broadband, telephones, roads and buildings. But in 2009 we still have more than $10 billion in unmet infrastructure needs. The reality is this – if we are going to change the reservation business climate, it will take billions of dollars. And that is exactly what the American Recovery and Reinvestment Act does. It offers Indian country more than $5 billion of new investment tools, and probably a lot more if we do our homework and think creatively.
For instance, the act offers $450 million in funding from the BIA for “shovel ready” school, road and jail projects, $85 million from the IHS for new health information technology, $310 million in roads funding, and $510 million in housing aid. These funds should lead to hundreds of new projects and thousands of new jobs.
But the real money is elsewhere in the act. The amount of money that tribes can raise through bond offerings can change the face of Indian country.
Let’s start with the $2 billion in new Tribal Economic Development Bonds. These tax exempt bonds can be sold by tribes to raise money to pay for the costs of building roads, buildings, installing broadband, water and sewer projects, and just about anything, except casinos. The catch is that tribes have until the end of 2010 to issue them, so tribes have to start working with the treasury and the interior now on ground rules so this program works for all tribes. Put it this way – if 100 tribes took advantage of these bonds, it would work out to $20 million for each tribe.
Tribes can also cash in with the Build America Bond program. The most unique feature of the program is that bond issuers, such as tribes, can elect to receive a cash payment directly from the federal government instead of a tax credit. The catch is that the payments only last for two years and after that tribes receive a tax credit. But, there is no national volume cap on Build America Bonds, so the only limit on the amount of bonds tribes can sell is the amount of money that investors are willing to put up.
The act also funds $1.6 billion in New Clean Renewable Energy Bonds and $2.4 billion in Qualified Energy Conservation Bonds. Tribes can issue new CREBs to finance renewable energy projects and construction and QECBs to finance electricity projects, renewable energy projects and energy efficiency retrofits. Tribes have to aggressively pursue these bonds or else the states, municipalities and electric co-ops will take them all.
The same applies to the $7.2 billion in new funding for broadband installation, equipment and service. About two-thirds of this funding will come out of the Commerce Department and one-third from the USDA. Internet access is a requirement for business, and critical for education and government. We can move light years into the future if we take advantage of the priority that the act gives to rural and underserved communities.
The Inter-Tribal Economic Alliance is already working to spread broadband development across Indian country. The ITEA is a $100 million business venture of 13 American Indian, Alaska Native and Native Hawaiian tribes and organizations committed to bringing economic development to Indian lands. The ITEA has started information technology, energy, housing construction, natural beef and private equity corporations. Its goal is to create 200,000 jobs in Indian country by 2010. The company has already created 500 jobs in its first two years of existence in Native communities in eight states. This is a good start and it shows just how important new infrastructure is to the restart of our economies.
Tex G. Hall is the former president of the National Congress of American Indians and former chairman of the Mandan, Hidatsa and Arikara Nation. Hall is chairman of the Inter-Tribal Economic Alliance and president of Maheshu Energy LLC and resides on the Fort Berthold Reservation in North Dakota.
