Tribes and Tribulations

Localities are struggling to deal with the issues that arise from being adjacent to Indian lands.
by | August 2007

When the Oneida Indian Nation signed a gaming compact with New York State in the early 1990s, Madison County, east of Syracuse, was promised that a casino on tribal land would give the local economy a big boost. But according to Rocky DiVeronica, chairman of the county board of supervisors, that has not turned out to be the case.

Gambling brings about 10,000 people a day on average to the area-- roughly equivalent to the population of the city of Oneida, which supplies the Turning Stone Resort & Casino with water. Federal law also requires that the county provide sewage treatment, lighting and road improvements leading to Indian lands. But not much of the money from visitors trickles down to the county, DiVeronica says. "They park their cars in the Oneida parking lot, gamble their money away and drive back out to where they came from," he says. "They do very little shopping, and they do very little tourism."

The Oneidas also operate a lodge, a motel and an RV park, none of which pay property taxes. The state, meanwhile, loses about $600 million per year in gasoline and cigarette taxes because of purchases at Indian-owned convenience stores and filling stations. And as a sovereign government, the Oneida Nation doesn't have to abide by county building codes or allow state weights and measures personnel to inspect its gas pumps for accuracy.

Despite its complaints, Madison County can't shrug off the nearly 5,000 jobs, with benefits, that are generated by the tribe's businesses. The Oneida Nation is the largest employer in two counties in the area. "You've got to strike a balance," says Mike Billard, majority analyst for the board of state Republican legislators. "You don't want to put 5,000 jobs in jeopardy, but there are taxation and fairness issues."

The relationship between the Oneidas and their neighboring localities is complex. The Indian nation has provided infrastructure for localities and given financial assistance to nearby school districts. But it doesn't have to. The rapport between the Indian nation and its neighbors is a constant work in progress. When there are disputes, opposing sides have dug into centuries-old issues such as what treaties George Washington signed to give the Indian nation its lands, and what authority the federal government has to expand Indian lands when New York has status as one of the original 13 colonies.

Cities and counties all over the country, particularly in rural areas, are struggling to deal with the issues that arise from being adjacent to Indian lands. They range from taxes to pressures on infrastructure to the effect of gambling on the economy. Unfortunately for local governments, they are in a weak position.

When casinos rise up on Indian lands, traffic increases, infrastructure is strained and a battle begins over who should pay for the fallout. Under federal law, Indian tribes sign compacts with states, not with locals. Those compacts lay out for tribes their financial responsibilities to states, and sometimes, localities. However, once past the paperwork, the tribes' activities mostly affect their neighbors on the ground. "We are the most directly impacted by the activity and have the least legal authority," says Mike McGowan, supervisor in Yolo County, California. "Our rights flow through the authority of state offices."

It's true that state authority also supersedes local authority when it comes to something like siting a prison. But in that case, there is a process for the county to get some of its needs met. And there are rules to make sure, for example, that environmental laws are followed by those facilities. The same is not true when dealing with the sovereign Native American governments.

Large casino developments affect traffic, air quality, water, sewage, property and sales taxes and more. Since localities don't have the authority to grant or deny casinos, hotels or other businesses on tribal land, they can only try to get the state or federal government to write rules that compel tribes to lessen the negative impact of their enterprises or pay for costs associated with them.


While there might be a standard tale of woe among local governments, there is no stock method of working through the tribe-local government relationship. It varies depending on the individual tribe and each of its neighbors. Some relationships are confrontational, others are cooperative, but all are unique.

Although counties can learn some things from each other's experiences, they're typically on their own in dealing with their particular situations. "It is very dynamic and very complex, with centuries of history and emotions and all kinds of incredibly challenging components" says McGowan. "It's not just a math equation here."

The counties, cities and villages near the Oneida Indian Nation know that quite well. Most local relationships with the Indian nation have been cooperative. For instance, the Oneida gave the village of Chittenango a $125,000 "gift" to upgrade downtown lighting because of "a feeling of warmth and bonding" after the village approached the nation with a "hand of friendship," says Diane Stirling, government relations director for the nation. She acknowledges that how the nation deals with other governments is based primarily on the personalities of the leaders, and their understanding of Indian culture. "It varies by individual and the political pressures those individuals are under."

One of the counties viewed less favorably by the nation, however, is adjacent Madison. Some of the tax issues that nettled DiVeronica were taken care of in a 2005 U.S. Supreme Court ruling. After the nation was sued in a land dispute, the high court ruled that it had no claim to land beyond its 32-acre reservation. Those gas stations and convenience stores outside the 32 acres had to pay property taxes. Yet, there is no mechanism for collecting those taxes from a sovereign nation, another court decreed.

The Indian nation subsequently paid about $5 million to the city of Oneida, the equivalent of the property taxes it owed from 1988 to 2005, after signing a compact with the city. The nation offered similar deals to other jurisdictions. But Madison County couldn't abide the conditions offered in a compact, such as allowing the nation to have its own building codes on non-nation land, DiVeronica says. The county voted not to sign a compact with the tribe and has not received any "tax" money.

The Oneida Indian Nation believes that one government should not pay taxes to another and that they have been good neighbors. In the mid- 90s, the nation supplied the town of Verona with a $7.1 million water system, which serves the casino and resort but also schools in three towns. It also gave $1.5 million to the city of Oneida for upgrades to its sewer system.

Mark Emery, a spokesman for the Oneidas, finds it curious that DiVeronica talks negatively about the effect of the nation on Madison County when in a 2006 "State of the County" address, DiVeronica was "happy to report" that the county is growing. He said that revenues were increasing through growth; that the taxable value of all property increased by $200 million, with $48 million in new construction over the previous tax period; and that the 2006 tax rate was down 7.5 percent from the year before.

Madison is not the only county unhappy about its plight as a tribe neighbor. Fremont County, Wyoming, feels it has been left with no power to mitigate the effects of gambling casinos on Northern Arapaho and the Eastern Shoshone land. Even the state has been cut out of the negotiating picture. The federal government ruled that Wyoming was acting in bad faith during compact negotiations and took them over.

When that happened, Doug Thompson, chairman of the Fremont County Commission, hurriedly made plans for a trip to Washington, D.C., fearful that the county would be left out in the cold in any deal making between the tribes and the federal government. He asked the Department of Interior to institute ground rules for Indian gambling that would lessen impacts to the county in areas such as solid waste, emergency service and law enforcement. He was turned down.

Currently, there are three casinos operating in the county, with five more on the drawing board. "The casinos are pretty much unregulated by the county," says Thompson. But the counties still provide services with tax dollars. "The fire department still comes," he says. "The ambulance still comes. The sheriff still comes."


The problem is not as acute in some other states. California Governor Arnold Schwarzenegger has taken a different approach than his predecessors when it comes to executing state-tribe compacts. All new compacts, and any amended ones, include requirements that the state get financial benefit from tribes and that impacts on local governments be taken into consideration. Since 2004, tribes under the new or amended compacts have been obligated to reach agreements with local communities on environmental, transportation and other issues. The governor has approved or amended 19 such compacts in that time, although nine of them have yet to be ratified by the legislature, as required under the national Indian Gaming Regulatory Act. The state has a total of about 70 tribal-state compacts.

Although tribes are required to perform an environmental study, they are not compelled to act on the results, Sonoma County supervisor Valerie Brown points out. Language in the compacts promotes discussions with California local governments, but in the case of an impasse, the two sides enter into arbitration. The Dry Creek Tribe in Sonoma recently submitted an environmental impact report related to a 300-room hotel, casino and resort on a hillside that Brown calls "incredibly inadequate."

But the situation is better than it was before. And some California counties don't feel as burdened as others by their local tribes. Supervisor McGowan says the Rumsey Band of Wintun Indians in Yolo has been responsive to the county, even before its compact was amended to require discussion with local governments. While the band doesn't always agree with the fixes the county wants, it often agrees there's a concern that needs to be dealt with. "That's progress," he says. "They want to work this out if they can."

Yet it is a dicey power struggle. A two-lane, winding, state highway with blind curves leads to the casino in Yolo. The road is handling extra casino traffic and now the tribe is proposing a casino expansion. It's a state road leading to a sovereign nation's land, but it runs through the county and creates access problems for the existing rural community. Although the county has no authority to prevent the tribe from building a new casino until the state widens the road, it feels compelled to work with the tribe on the issue as best it can.

Even when the relationship with local tribes is good, counties are wary about the future. Grand Traverse County, Michigan, enjoys a congenial working relationship with the Grand Traverse Band of Ottawa and Chippewa Indians, which has run a casino in the area for the past decade. The band has asked the federal government to put into trust rural land adjacent to its reservation. Lands in trust come off the tax rolls.

The county is concerned that little by little, the amount of land in trust will stretch until it reaches the Grand Traverse Resort, a property purchased by the band more than a decade ago. It is not now on tribal land. But if the federal government agrees to put more and more land into trust, the reservation could end up reaching the resort. The county would be walloped financially if that land were to be taken off the tax rolls. "It would be a huge financial burden for taxes, for schools," says county commissioner Larry Inman. "That's our concern."

Ellen Perlman
Ellen Perlman | Former columnist |