King County Superior Court Judge Mary Roberts ruled in favor of the city of Snoqualmie against the Washington Department of Revenue and repealed ESHB 1287 on March 4.
The bill would have given property tax exemptions to tribes on non-reservation lands purchased before March 1, 2014, and subsequently shifted the tax burden to residents.
“I didn’t come into office to serve the city and government of Snoqualmie, but the citizens of Snoqualmie,” said Mayor Matt Larson, who brought his appeal to Olympia in early February, “and they, and any cities in this position, just kind of got the short shaft. There’s no accountability for what happened, no one was informed that their taxes just went up.”
Passed in 2014, the house bill was effective June 12 and gave federally recognized Native American tribes the same property exemptions as state and local governments if the land was used for “economic development.”
The bill still imposed a payment in lieu of tax (PILT), which was determined by the tribe and county, but handed off to the Department of Revenue, whose sole purpose is to collect taxes, if they couldn’t reach an agreement.
Judge Roberts ruled that the ayment in lieu of tax violated the state’s constitution “because it is not imposed at an equal tax rate and does not produce equality in valuing the property taxed” and moves taxation authority outside of the legislature’s hands.
The judge’s actions also halted Senate Bill 5811, which was an attempt to remove the March 1, 2014, purchase deadline for applications.
“I think the argument breaks down on a couple of different levels,” Larson said, “one (being), where a tribe is unlike the local government, is that because they’re a sovereign nation there’s a lack of accountability and transparency.”
Local governments receive tax breaks for operating municipal airports, golf courses, hotels, etc., but Larson said allowing a sovereign nation the same tax breaks outside of proper reservations is an “apples to oranges situation.”
He argued local governments are obligated to provide monetary information in public records to show how the tax breaks are bringing benefits back into the community rather than competing with local businesses, while tribal governments don’t have to reveal anything.
He also argued that even the city of Snoqualmie can’t purchase a hotel in Seattle and receive tax breaks on it, so why should tribal government operate differently?
“A tribe, ostensibly, is serving the population it’s committed to serving – the tribal members,” he began. “And where tribal members may be (located) versus where their investments are, may be 100 miles apart. An example is the Salish. The Salish is 15 to 20 miles from the Muckleshoot Reservation, so there’s nothing that assures that the profits derived from that activity are going to stay in the local community that it serves.”
In a city-wide press release, Snoqualmie projected that, because the Salish Lodge alone applied for and received the exemption, that city would lose $109,000 in property taxes and $400,000 owed district-wide. This would raise property taxes for homeowners by roughly $20 to $30 a year. The burden shifts in this instance because a city’s tax base is pre-determined — this means if existing property values are wiped off the board, someone has to compensate the dollars that make up what the city government needs to run.
Although the repeal of HB 1287 could directly affect the Muckleshoot Tribe, Snoqualmie’s own said it has nothing to do with them.
“Since we don’t own businesses or generate revenue off of our reservation, the amendment doesn’t apply to the Snoqualmie Indian Tribe’s day-to-day operations,” wrote Jim Bove, Snoqualmie Indian Tribe’s PR and marketing communications officer, in an e-mail.
“Indian tribes are important members of our community, and we appreciate the history, culture and services they contribute,” Larson added in a press release. “It is critical that new economic development pay its fair share of property and other taxes, and not shift their taxes onto ordinary citizens and small businesses.”
