Mohawks, Pataki sign; agree to future tax negotiations

ALBANY, N.Y. – Mohawk leaders signed an amended land claim deal with New
York Gov. George Pataki Feb. 1 that clears the way for their long-delayed
Catskills casino and defers the volatile sales tax issue for further
negotiations.

“It was wonderful, said Chief James Ransom of the St. Regis Tribal Council.
“Knowing we were signing with the support of the community was especially
important to us.” Delegates from the St. Regis Reservation in the U.S., the
Mohawk Council of Akwesasne in Canada and the traditional Mohawk Nation
Council of Chiefs came to the governor’s Executive Chamber in the State
Capitol to approve a pact ending 23 years of lawsuits. Referenda in both
the Canadian and U.S. communities in November had approved the terms by
wide margins. As soon as the St. Regis Tribal Council delegates returned
home to their reservation on the U.S. side, they began a series of meetings
to reassure tribal members about the sales tax negotiations.

The agreement provides $100 million in payments, including $30 million from
the state within three years; return of two islands in the St. Lawrence
River; provisions for purchases from willing buyers that could double the
size of the St. Regis reservation; cheap electrical power from the Niagara
Mohawk utility; and free tuition for tribal students in the state
university system.

“It hit us how historical this moment was, in our past and in our future,”
said Ransom.

The immediate future for the St. Regis Mohawks will feature a
community-wide debate on a separate trade agreement with the state,
proposed by the tribal council to resolve the state tax collection issue.
As soon as the St. Regis Tribal Council delegates returned home to their
reservation on the U.S. side, they began a series of meetings to reassure
tribal members about the sales tax negotiations.

The St. Regis council issued a statement to counter a press release from
Gov. Pataki’s office linking a sales tax deal to the land settlement.
Highlighting in capital letters that “Tribe and state propose NEGOTIATING”
a trade agreement, the council said that any deal would go through “a
community ratification process,” possibly similar to the November
referendum on the land settlement.

According to the statement, the tribal council proposed a trade agreement
as a solution to intense political pressure on Gov. Pataki to attempt to
collect a tax on sales to non-Indians on the St. Regis reservation. The
framework of negotiation would in effect barter the market at the proposed
off-reservation Mohawk casino in the Catskills against state
nonintervention on the reservation in Northern New York.

The proposal for negotiation presented to the St. Regis community said the
tribe would agree to the collection of sales taxes on non-Indian purchases
at the 66-acre casino site in Sullivan County of “alcoholic beverages,
cigarettes, tobacco products, automotive fuels and all other retail
tangible personal property.” It would also include services, presumably
including restaurant meals. But taxes would not be collected on
“traditional Indian arts and crafts.”

In return, said the proposal, the state would “take into account” the
existing tribal program “to require retailers, wholesalers and
manufacturers of alcoholic beverages, cigarettes, tobacco products and
automotive fuels operating on or from St. Regis Mohawk Reservation
(Akwesasne) to be licensed by the tribal council, to pay licensing fees and
to maintain certain levels of minimum retail pricing.” Tribal regulations
currently set the gas price on the reservation at 10 cents below the
neighboring retail level, said council spokesman Brendan White.

The same language appeared in the governor’s press release, but as a run-on
to the terms of the land settlement that made it appear to be a done deal.
Pataki did, however, say in the release, “The state has also agreed to
negotiate a separate agreement with the St. Regis Mohawk Tribe to resolve
retail pricing and sales tax issues.”

Referring to proposed land claims settlements with several out-of-state
tribes, he added, “As we have seen from the four other land claim
settlement agreements, the most effective way to resolve retail tax parity
issues with the Indian nations are in a spirit of cooperation, not
confrontation.”

The governor’s office told the Mohawk delegates that legislation
incorporating all five agreements could go to the New York State
Legislature as early as the afternoon of the ceremony. Congressional
legislation would also be required to settle the land claims, based on
earlier state violations of the 1790 federal Non-Intercourse Act.

The trade agreement negotiations will be watched closely for the degree to
which the state would formally agree not to attempt to tax transactions on
traditional Akwesasne territory, which will double in extent under the land
settlement. The tribe is already making the case that the surrounding
economy will benefit from a tax-free regimen. On the other hand, it argues,
an attempt to collect state taxes would force many of the nearly 100
tribally-licensed Native businesses to close, severely impacting the entire
financially strapped region and endangering tribal services.

Under heavy lobbying from non-Indian convenience store and gasoline station
groups, the New York Legislature has twice in the past two years passed
directives to the Pataki administration to collect taxes on reservations.
Gov. Pataki vetoed the latest such measure late last year. But he has
pushed for tax collections in offering Catskill casinos to settle land
claims with the Seneca-Cayugas of Oklahoma, the Stockbridge-Munsee Mohicans
of Wisconsin and the Oneida of Wisconsin. A fourth deal with the Cayuga
Tribe of New York is up in the air because of internal dissension in the
tribal government.

Pataki dropped an earlier attempt to collect sales tax in 1997, when
grassroots tribal protests closed interstate highways and led to violent
confrontations with state police.

Tribal political passions almost literally derailed Pataki’s previous
attempt to seal a land claim deal with the St. Regis council. Leaders of
the previous St. Regis Mohawk Tribal Council had accepted a global measure
including sales tax and price parity provisions. But they never made it to
the state capital for the signing in May 2003. A car driven by an opponent
of the deal sideswiped their van as they were driving to the airport and
forced them off the road. The tax issue led to defeat of the incumbents in
subsequent tribal elections.