Oglala Sioux Tribal Council Tax Causes Uproar Story-Date: 09:42 a.m. PST Sunday , November 30, 1997 ------------------------------------------------------------ Oglala Sioux Tribal Council Tax Causes Uproar By David Rooks, Indian Country Today, Rapid City, S.D. Knight-Ridder/Tribune Business News PINE RIDGE, S.D.--Dec. 1--Though still on the distant horizon, storm clouds appear to be gathering over a recent Oglala Sioux Tribal Council ordinance placing a two percent tax on all Indian Health Service and BIA employees. Tribal Ordinance 97-15 gained passage by unanimous consent in council session on Nov 7. With its passage the OST Council signaled its determination that the 2 percent tax paid by all tribal employees since 1988, be shared by their federal counterparts. In its present form, Tribal Ordinance 97-15 applies to all federal workers, tribal member and non-Indian alike, employed within the boundaries of the Pine Ridge Reservation. The ordinance's pertinent section reads: "THEREFORE BE IT ORDAINED, that the Oglala Sioux Tribal Council does hereby assess and impose upon all employees of the Indian Health Services and the Bureau of Indian Affairs who work upon the Pine Ridge Indian Reservation, a two percent employment fee upon the gross annual compensation rate of such employee," The ordinance states the tax is collectible immediately upon implementation. "I know there's going to be some controversy -- especially about this. But something's got to be done," said Davey Pourier, director of OST Revenue. Citing expected drops in funding due to recent welfare reform legislation, Mr Pourier went on to say, "There are a number of tribal members working for the federal government who regularly come to the tribe for assistance. "They'll say they need their electricity turned back on, or whatever. These people have good jobs, in some cases two good jobs. What do they pay in to the tribe? Nothing." The tribe's director of revenue also observed a large percentage of tribal members working at IHS and the BIA also live in low income housing, provided through tribally chartered programs. "The tribe provides police service, picks up their garbage, and, for a lot of them, helps to educate their children," Mr. Pourier said. "Until now, they've been getting it free. The tribe's employees pay in." Concerning the BIA's official response to the ordinance, Pine Ridge Agency Superintendent Bob Ecoffey said, "The tribe does have the authority to levy taxes. This is spelled out in their Constitution and by-laws." In a related matter the superintendent added, "From the BIA this ordinance would generate around $45,000 annually for the tribe, and this doesn't include BIA Education employees." In a similar ordinance passed unanimously in July, 1992, the tribal council added Oglala tribal chartered entities to the ranks of the tribal employees who have paid the tax since 1989. This act effectively made all 638 contract and one hundred 297 grant school employees subject to the tax. Due to a court challenge by employees of Little Wound School, implementation of the 1992 ordinance was suspended. However, Little Wound School's challenge confined itself to the implementation of the ordinance. The basic legality of ordinance 92-05 remains unchallenged. Mr. Pourier said some of the problems applying the ordinance have been solved. The tribe's preliminary plan is to introduce the tax when contracts are renewed for grant school employees. Norma Tibbitts, agency superintendent for education, said, "One question I do have is does this affect the many consultants that our grant schools utilize? This ordinance raises a few questions." Some employees at Little Wound School in Kyle, a grant school, indicated they are preparing a challenge to the ordinance. A question related to ordinance 97-15 and two previous employment fee ordinances is why tribal officials hesitate to identify the ordinance as an income tax. In an opinion related to a proposed tribal "Occupation Tax" dating as far back as 1983, then associate solicitor for the BIA, Larry J. Jensen referred to the "fee" as "what amounts to an income tax." Tribal Judge Pat Lee also found the council's insistence that their employment fee is not an income tax problematic. While agreeing that, legally, it can be considered an employment fee, Judge Lee conceded that, basically, it was a tax on income, and that it was determined by amount of income. In any case Judge Lee considered the point moot because the tribe does have the authority to impose an income tax. Asked about the tribe's hesitancy to identify the ordinance as an income tax, Mr. Pourier said the council was concerned the tax would be misunderstood by tribal members. Though several attempts were made to reach Michael Graham, tribal treasurer, he was unavailable for comment. Both Vern Donnell, Pine Ridge Hospital Service Unit director, and Bob Ecoffey, BIA superintendent, have been in close consultation with the tribe on the employment tax since last March. "My initial response was and is some form of tax is a good idea," said Mr. Donnell. "You have to develop a local infrastructure and how else are you going to pay for it?" Acknowledging that many employees at IHS had voiced misgivings about the tax, Mr. Donnell said, "I believe those employees would be more apt to buy into taxation if they knew the money was targeted to specific local projects." While paragraph five of the ordinance does state that the fees of the ordinance shall be "utilized for special projects" it does not limit itself to these -- a political back door that many worry any tribal politician could drive a legal Mack truck through. Responding to questions of how the additional revenues will be managed, Mr. Pourier said his understanding was that the funds would be maintained in an account separate from the general fund. Another potential problem with the ordinance is its exemption of private and state employees. When questioned about the ordinance's exemption of these workers, Judge Lee said, "It will probably require a lawsuit to determine the extent of its applicability." ----- Visit Indian Country Today on the World Wide Web at http://www.indiancountry.com/ ----- (c) 1997, Indian Country Today, Rapid City, S.D. Distributed by Knight-Ridder/Tribune Business News. ------------------------------------------------------------