Bill eyes creating an Indian county

State lawmakers have revived a decades-old plan to turn the Navajo and Hopi reservations into a separate county so the tribes can claim a share of state revenue.

While Arizona cities and counties get back a percentage of sales taxes the state collects from their businesses and residents, tribal governments, which are considered to have sovereignty, do not share in such tax revenue.

For more than 30 years, northern Arizona lawmakers have fought to find a way to return revenue collected on the reservations to the people living there.

Although Native Americans living and working on a reservation are exempt from many state taxes — including property taxes — the state does collect some money from businesses and residents on the reservations. Arizona gets about $16 million a year in

sales-tax revenue from non-Navajo residents doing business on the reservation with a non-Navajo business. It brings in about $120,000 from the Hopi Reservation.

Citing the inequity, lawmakers over the years have unsuccessfully proposed changing state law to give reservations a percentage of the state revenue collected on reservations. They had also proposed making Arizona’s portion of the Navajo Reservation a separate county so it could collect state-shared revenue.

This session, a bipartisan group of lawmakers has brought the two ideas together in a bill that would create a committee to study creating a new county that would encompass the Navajo and Hopi reservations in northeastern Arizona. The Hopi Reservation is within the Navajo boundaries.

Senate Bill 1283 passed the Senate Government and Environment Committee unanimously last week. It now goes before the full Senate before moving on to the House. If it passes the Legislature and Gov. Jan Brewer signs it into law, the committee would have to research the issue and produce a report by Dec. 31.

Sen. Chester Crandell, R-Heber, and Sen. Jack Jackson Jr., D-Window Rock, are working together on the bill.

“They collect taxes on the reservation, so they should be allowed to participate in revenue sharing,” Crandell said. “This study committee would look at how to divide taxes up. It’s not forcing anybody to do anything except come to the table and have a discussion.”

Crandell said he doesn’t know why efforts in prior years never went anywhere. But he said now may be the time. The recently redrawn congressional boundaries gave the Navajo Nation more of a voice in Congressional District1, and Crandell said Native American groups are asking for more of a voice in state and local government as well.

Jackson’s involvement continues a family tradition. His father, Jack Jackson Sr., introduced legislation when he was in the Senate to establish a study committee. The bill passed and members were assigned to the committee, but the Senate secretary’s office has no record that the committee ever met or produced a report.

“You would be creating a county where it would be mostly Indian people,” Jackson said. “But I don’t know how other folks would feel about it. I don’t know how the (Navajo) Nation itself, or the Hopi Tribe, would feel.”

He has spoken to Apache County leaders, but they are waiting to see what comes of the legislation.

“There are a lot of unknowns about what this would entail,” Jackson said. “But we should see what the pros and cons are.”

He said the most immediate benefit could be to give the Navajos access to state-shared revenue. “How that happens, I don’t know,” he said.

Jackson and Rep. Albert Hale, D-St. Michaels, who are both Navajo,

‘‘ They collect taxes on the reservation, so they should be allowed to participate in revenue sharing.”

STATE SEN. CHESTER CRANDELL

One of the bill’s sponsors

also have bills focused on looking solely at that idea. But SB 1319 and HB 2522 do not have bipartisan support and face an uphill fight to even get a committee hearing.

It’s unclear how much a new county could get in state-shared revenue, which includes a portion of income taxes, sales taxes, Highway User Revenue Fund money, vehicle-license taxes and Local Transportation Assistance Fund money. The state gets a portion, and then the remaining money is distributed to cities and counties based on population.

The Navajo and Hopi reservations are now split among three counties. Last fiscal year, Apache County got $4 million in state-shared revenue, Coconino County got $17 million and Navajo County got $9 million. The reservations encompass about two-thirds of Apache and Navajo counties and about one-third of Coconino County.

It’s also unclear what a county government with the same boundaries as a reservation would look like. Such a county would not be the first of its kind. In Oklahoma, the Osage Nation’s reservation boundaries are also the boundaries of Osage County. It’s about 2,200 square miles with a population of 47,000.

But any new Arizona county would not cover the entire Navajo Reservation, which extends into Utah and New Mexico. The entire reservation, most of which is in Arizona, is about 27,000 square miles with a population of about 250,000.

The Legislature in1982 passed a bill to create a new county around the reservation boundaries, but then-Gov. Bruce Babbitt vetoed it.

The motivation for that bill was different, however. It was based on squabbling between the Native Americans who lived on the reservation and residents who lived outside it. The Apache County Board of Supervisors, whose majority at the time was composed of Navajos, was accused of raising property taxes only on those living outside the reservation because tribal members living on the reservation are exempt.

Navajos called it a race war. Babbitt in media reports said he feared the plan was unconstitutional, discriminatory and would have segregated Native Americans.

So far, no individual or organization has registered opposition to the new bill. The Arizona Association of Counties said it has not taken a position on the bill.

Coconino County spokesman Nathan Gonzales said the Board of Supervisors is expected to discuss the bill, possibly at its meeting this week.

“Everyone’s waiting to see how this goes through the Legislature,” he said.

The Navajo Nation media office did not respond to a request for comment on the Navajo position on the legislation.