Tribal leaders criticize the State of Oklahoma's position

Monday, September 22nd 2003, 12:00 am
By: News On 6

OKLAHOMA CITY (AP) _ Indian tribal leaders sparred with the administration of Gov. Brad Henry Monday over extending agreements over Indian tobacco sales. Those agreements, or compacts, are scheduled to expire this month.

At a news conference, tribal spokesmen accused state officials of adopting a take-it-or-leave-it attitude against compact extensions, while pushing a plan to increase taxes paid by tribes in the future.

Oklahoma and Indian tribes began negotiating compacts on tobacco sales and other issues after a 1991 Supreme Court ruling allowing states to collect taxes on sales to non-Indians. Several of those contracts are to expire Sept. 30.

Jim Gray, principal chief of Osage Tribal Council, protested a proposal he said would double the tax burden of tribal smoke shops, which now pay 25 percent of the tax other retailers pay on tobacco sales.

Gray said Oklahoma is going through ``terrible'' economic times, but ``it seems entirely unfair to balance the state's books on the backs of the tribes.''

Scott Meacham, state finance director who is leading the contract negotiations on behalf of the state, said the increase would only affect any future increases in tobacco taxes. Tribal smoke shops would have to pay half of any such increase.

Meacham said tribes would continue to have same advantage they now have on current taxes. The state now collects taxes on Indian sales that is 25 percent of that paid by other tobacco retailers.

Gray said Meacham, in a letter to tribal leaders, had basically taken the position that tribes must sign new compacts ``or expect enforcement.''

Meacham said he had not warned of any new enforcement action in correspondence with the tribes.

``The problem we are now facing is that this small group of tribes has decided they will only accept an extension of their current compacts,'' Meacham said.

``For these tribes, it's an all-or-nothing proposition: We do things their way or not at all. We have indicated we are not willing to simply roll over the old compacts and have invited them to meet with us and discuss alternatives that will satisfy both sides.''

He said negotiations are continuing with several tribes who have tobacco compacts and he feels ``we will reach compacts with these tribes that are beneficial to them, as well as the state.''

Edwin Marshall, representing the Muscogee Creek Nation, said tribes make up the third largest segment of the Oklahoma economy and money they raise from tobacco sales and other enterprises save the state millions in road construction, health care and other costs.

Marshall said it is in the state's interest to make sure that Indian enterprises flourish.

Some tribal spokesman said raising the tax paid on tobacco sales put smoke shops in border areas at a competitive disadvantage.

``We've worked out a solution to that, but they're not aware of it because they haven't been talking to us,'' Meacham said.

Henry has said he wants to have the tobacco compacts finished in time for review by the 2003 Legislature.

Under law, tribes that do not have a compact with the state are subject to being taxed at a higher rate than those that have compacts.