Keating wants to revise tribal tobacco sales compacts

<br>TULSA, Okla. (AP) _ Gov. Frank Keating wants to revise tribal tobacco sales compacts to increase the portion of collected tobacco taxes the shops give the state, the governor's top aide says. <br><br>Keating

Wednesday, December 4th 2002, 12:00 am

By: News On 6

TULSA, Okla. (AP) _ Gov. Frank Keating wants to revise tribal tobacco sales compacts to increase the portion of collected tobacco taxes the shops give the state, the governor's top aide says.

Keating notified 12 tribes of the state's intent to terminate their deals to ``level the playing field'' between tribal and non-tribal tobacco sellers, Howard Barnett, Keating's chief of staff said Tuesday.

Although the state is facing hefty budget shortfalls, the governor's goal is not to increase cash flows to the state, Barnett said.

``Our goal is not really revenue driven, though it could end up being that way,'' Barnett said. ``We're really concerned about a level playing field.''

Tribal tax commissioners and attorneys, who met in early November to discuss Keating's letter informing them of his desire to revise the deals, were meeting again Wednesday in Pawhuska to discuss the compacts.

Under the compacts that are about 10 years old, tribes remit 25 percent of their tobacco tax collections to the state. The figure is intended to represent the percentage of non-Indians going to smoke shops.

But Keating thinks that number should be higher, said Barnett, who said the governor has not decided on a more appropriate percentage.

Barnett was co-chairman earlier this year of a tax reform task force that recommended increasing the state cigarette tax. Health officials also say an increase would curb smoking.

Non-tribal tobacco sellers are concerned about that because a tax increase would affect them more than the tribal dealers, giving the American Indians an unfair advantage, Barnett said.

Oklahoma has a law that if a tribe does not compact with the state then it's assumed that 75 percent of its tobacco sales are from outside the tribe, Barnett said. The compacts are the opposite, assuming that only 25 percent is non-tribal, he said.

Changing the compacts could also eliminate one distraction next year when the Legislature debates increasing the cigarette tax, as recommended by the task force, Barnett said.

``It would be nice if we had compacts that allowed that debate to occur based on the merits of raising the tax or not, as opposed to Indian smoke shops and level playing fields and those sorts of things,'' he said.