Tulalips plan big for a new 'city'
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It's true, he says, that the Tulalips incorporated the business park 15 months ago as a strategy to snag part of the 6.5 percent state sales tax now collected by Quil Ceda stores. But McCoy, the Tulalips' acting city manager and longtime government-affairs director, bristles at the expression "tax grab."
"We are putting in all the infrastructure — roads, sewer, sidewalks — we're paying for all that ourselves," he said. "Citizens around the reservation, whether they are Indian or non-Indian, get a direct benefit from everything we do."
The Tulalips hope the Legislature will pass a bill this year authorizing a pilot project allowing the state to share sales taxes with up to three Indian tribes. Last year, the co-chairs of the House Finance Committee sponsored the bill, which passed out of their committee but then stalled in another House committee.
Native Americans around the nation are watching, because the Tulalips are considered an especially progressive, successful tribe. While a handful of other tribes charge taxes, such as the Navajos' taxes on apartments, pipelines and utility rights of ways, the Tulalips might be the first tribe to collect retail sales taxes on a large scale.
At stake is an estimated $50 million in annual state sales taxes to be generated when Quil Ceda's initial 465-acre phase is complete along Interstate 5 between 88th and 116th streets northeast. While the Tulalips would like to keep it all, they expect to negotiate a compromise, McCoy said.
For now, Quil Ceda consists of two stores, Home Depot and Wal-Mart, which both opened last year. Foundation work is under way on a new casino, more than double the size of the Tulalips' original, successful casino.
Also planned for Quil Ceda Village are a 55-acre premium outlet mall, an amusement park, a hotel and convention center, an amphitheater, and much more retail space, including small Tulalip-owned businesses. Interpretive trails will be added to a 68-acre wetland behind Wal-Mart and Home Depot.
State Rep. Jack Cairnes, R-Kent, co-sponsored last year's bill, which would authorize the governor to negotiate tax compacts with three tribes on a pilot basis. The tribes would be allowed to spend the sales-tax receipts only on roads, education, health care, sewers, water supply, law enforcement and fire protection.
The bill is still alive, Cairnes said, and will not need to be reintroduced when the next legislative session begins Jan. 14. While Cairnes endorses the concept of tribal, tax-collecting entities, he's unhappy with the Tulalip proposal.
"I would like to see them expand the (Quil Ceda) boundaries and become a bona fide city with people living in it," he said. "I would like to see all the tribes start taking a look in that direction.
"The little fly in the ointment is they haven't incorporated the residential areas, just the business area. The criticism I hear from both parties is it's just a ploy to capture part of the sales tax."
Tribes, however, are unlikely to incorporate their reservations under state law because of potential erosion of their sovereign-nation status. Their treaties with the federal government provide an independence that could conflict with state laws.
The Tulalips incorporated Quil Ceda under tribal laws, and the village has been recognized as an independent entity by the federal Bureau of Indian Affairs and the Internal Revenue Service.
To establish Quil Ceda as a city under state law, the Snohomish County Council would have to create a new urban-growth area under the state Growth Management Act, with a population of at least 1,500. Then a petition would authorize an election, and Quil Ceda residents would vote on the proposal.
The Tulalips have no interest in becoming a state municipality, McCoy said. They incorporated Quil Ceda as a mechanism to collect taxes, he said.
Customers at Wal-Mart and Home Depot are now charged 8.5 percent in total sales taxes — 6.5 percent for the state, 1 percent for Snohomish County, 0.9 percent for Community Transit and 0.1 percent for county law enforcement.
Federal law allows tribes to charge an additional sales tax, but the Tulalips fear that would harm the competitiveness of Quil Ceda businesses, McCoy said.
Dan Clements, county finance director, is sympathetic to the Tulalips' problem.
"What we really need to do in Washington state is to find some sort of governance model that works for a tribe and that doesn't exist now," he said.
The state Department of Revenue also has studied the Tulalip proposal.
"This is a new area of government relationships, as tribes go from just having smoke shops or very little economic development to all of a sudden having shopping centers," said department spokesman Mike Gowrylow. "I can see how tribes would think they have a right to some of the revenue being generated."
In terms of successfully developing their own economic resources, the Tulalips are among the nation's top 10 tribes, said Alan Parker, director of the Northwest Indian Applied Research Institute at Evergreen State College.
"They are savvy — they understand that politics and business are inexplicably linked," he said. "That sets them apart from other tribes. Many tribes are isolationists, for understandable reasons. They have been an oppressed minority for years, the victim of exploitation by government and local people, and they survived by pulling into their shell."
It's not fair to expect the Tulalips to use their casino revenues as a "self-tax" to run their government, he said.
"When they do that, they are blurring the lines between enterprise and government," Parker said. "It's better if you have a bright line between those two functions."
Before the casino opened in 1992, 60 percent of Tulalip tribal members were on welfare. The casino and its revenues have provided jobs, college tuitions, tribal-elder housing, a Montessori school for toddlers, medical and dental services, counseling programs and many new social-service buildings.
A few tribes are more dramatically successful.
The Salt River Pima, for instance, own an upscale shopping center anchored by a Neiman Marcus store on the edge of Scottsdale, Ariz. While they don't charge sales taxes, they collect lease payments, Parker said.
And the Agua Caliente Band of Cahuilla Indians owns 6,700 acres of Palm Springs, Calif., including the land beneath the Palm Springs Convention Center and major hotels.
Those are McCoy's role models, too.
The Tulalips plan to continue developing Quil Ceda Village no matter what the Legislature does this year, he said.
Eventually, he said, "equity and fairness will come into play."