sales tax

Navajo Nation Sales Tax

Year

Challenges facing sovereign nations include how to support themselves financially, run their governments, and meet the needs of their peoples. In 1974, the Navajo Nation established a Navajo Tax Commission. Following a US Supreme Court decision affirming the Nation’s right to impose taxes, the Commission began to collect specific taxes. In 2002, the Nation instituted a tribal sales tax as a strategy for decreasing tribal government dependence on revenue from federal and state grants and from the sale of non-renewable resources. Relying on the traditional concept Beenahaz’aanii Nahat’a (an act of gathering individuals to reach group understanding), the tribal government consulted citizens before introducing the policy, generating a buy-in for an initiative that has already raised $43 million for the Nation. Among other things, sales tax revenues fund local government, giving financial teeth to a major effort by the Nation to put more decision-making power in the hands of local Navajo communities.

 

Native Nations
Resource Type
Citation

"Navajo Nation Sales Tax". Honoring Nations: 2005 Honoree. The Harvard Project on American Indian Economic Development, John F. Kennedy School of Government, Harvard University. Cambridge, Massachusetts. 2006. Report. 

Permissions

This Honoring Nations report is featured on the Indigenous Governance Database with the permission of the Harvard Project on American Indian Economic Development. 

Diane Enos: Building a Sustainable Economy at Salt River

Producer
Native Nations Institute
Year

In this informative interview with NNI's Ian Record, Diane Enos, President of the Salt River Pima-Maricopa Indian Community, discusses some of the many significant steps that Salt River has taken over the past few decades to systematically build a self-sufficient, sustainable economy.

People
Resource Type
Citation

Enos, Diane. "Building a Sustainable Economy at Salt River." Leading Native Nations interview series. Native Nations Institute for Leadership, Management, and Policy, The University of Arizona. Tucson, Arizona. September 28, 2010. Interview.

Ian Record:

Welcome to Leading Native Nations. I’m your host, Ian Record. On today’s program, I’m honored to have with me President Diane Enos of the Salt River Pima-Maricopa Indian Community. President Enos has served in that capacity since 2006 and recently won re-election for another four years. Previous to her becoming president of her nation, she served for 16 years on the tribal council. And in terms of her other current responsibilities, she’s president of the executive board of the Intertribal Council of Arizona, and past chairwoman of Arizona Indian Gaming Association. Diane, welcome.

Diane Enos:

Welcome to you.

Ian Record:

Well, I just gave a few highlights of your very busy life and I was wondering if you could just share with us a little bit more about yourself.

Diane Enos:

Well, I am the parent of two boys, ages 6 and 7. So that is really my driving force in addition to my community. I became their guardian after their mother passed away in my family. So they are a source of life for me now. So as you can imagine, in addition to my job duties and my other responsibilities, to me that is the most important job I have right now, as a parent.

Ian Record:

So you don’t, you probably don’t sleep very much do you?

Diane Enos:

I try as much as I can [laughs], but I get up early!

Ian Record:

Yeah, I bet. Well, we’re here today to talk about economic development in Indian Country and focus specifically on what your nation, the Salt River Pima-Maricopa Indian Community has been doing in that area, one of the progressive leaders across Indian Country by all accounts. But first I’d like to talk a little bit more generally about economic development and get your thoughts based upon your vast experience in this area and essentially get your, some food for thought from you that other nations and other leaders might learn from. And my first question is, how do nations move from a dependent economy, where they’re heavily reliant on the federal government, to a productive one, where they themselves are in the driver’s seat?

Diane Enos:

That movement depends on the nation itself. It depends on the resources that are available. It depends on the drive to do more than survive the colonization that we’ve all undergone. But a lot of times you have to be, as a nation you have to be willing to take calculated risks. For us, what we did in 1987 was purchase the Phoenix Cement Company with the guaranteed loan, just guaranteed by the federal government, and that enabled us not only to create jobs but to also create an enterprise that had a, it’s returned the amount of money we had to borrow many times. So, it’s an example of having to take risks.

Ian Record:

I assume coupled with that was a movement on the part of your nation to essentially build up the capacity needed to make economic development happen, both human resources and institutional resources, wasn’t it?

Diane Enos:

When you look at what’s available to you, a lot of tribes, like I said before, you have to look at where people live and what kind of resources are there. For us, we had the dry riverbed as a source of aggregate for sand and gravel mining, so we use that. Now some people might think that that’s contrary to our values to, in some senses, deface the earth, but we look at things in terms of gifts from the earth and from our Creator to help us survive in this world. Whether you go and kill a deer or kill an animal and eat that animal to survive or whether you go and dig up aggregates from the riverbed and turn around and market those in order to provide for your people, are two very similar things. So it’s a matter of being able to consider what you have to do to help your people out to make things better for them.

Ian Record:

So you mentioned that the community in 1987 purchased the cement company,

Diane Enos:

Yes.

Ian Record:

And prior to that would you say that your tribal economy was essentially a dependent one, as I mentioned?

Diane Enos:

I would say so to some degree, because when I grew up here, when I was growing up as a child here, we didn’t have, for instance, indoor plumbing. We didn’t have paved roads. We didn’t have telephones. Few people had electricity. We didn’t have, I think we had maybe a couple of police officers. We had the BIA [Bureau of Indian Affairs] school, which I went to, and the Indian Health Service. So, yes, dependent, the tribe wasn’t in a position or at that time wasn’t actively pursuing economic development. We were fairly isolated, I would say, for the time.

Ian Record:

So back during that period, essentially a dependent economy, you were relying, I would assume, primarily on the federal government for transfer dollars,

Diane Enos:

For programs, yes.

Ian Records:

For programs.

Diane Enos:

But I think for people, in order to make money for your living, people have always gone off the reservation to work. And I know that my father, my own dad, worked in construction and in order to do that, to provide for his family, he would go with several other men and live in Tucson and do construction work during the week and come home on the weekends. And I remember that he did that for several years and they even went to Kingman, I think. They went where the work was; a lot of people did that. So as far as a dependent economy, I think we’re talking about programs for the tribes as a whole, yes.

Ian Record:

So what were some of the drawbacks to having that dependent economy in terms of being reliant, so reliant on outsiders for essentially the tribal government,

Diane Enos:

You have no control over it. You have very minimal, if any, control over where those dollars are directed. And it doesn’t empower your people to achieve more and it doesn’t, it keeps you down, so to speak. It’s another arm of the colonization I mentioned earlier. It’s very limiting. You don’t get to strive for more, because all you do is when you’re a dependent economy is wait for the next turn of funding and if, that’s unpredictable and it certainly isn’t a way for you to expand what your resources are capable of doing, because you’re dependent on direction and programming from the federal government.

Ian Record:

We’ve heard, and other leaders I’ve sat down with, I’ve heard them speak of a couple of other, I guess, dynamics to that dependent economy, which is that the measurements of success, the criteria for determining whether a program or the dollars that are being spent in a particular community are having, are achieving their intended goal, those are being set by outsiders not by the people themselves. And those criteria may be very different. Is that something that you saw back then?

Diane Enos:

I’m not sure back then, since I wasn’t in government, I’m not sure how that actually worked, but I do know from those periods of time...I had an interesting experience one time. I remember talking to the tribal chairman when I was 16 years old. I went into his office and I asked him about programming and the information that he gave me was very limited. And it appears to me now, in retrospect, that people in elected positions at that time, and I’m talking about tribal positions, didn’t have a whole lot of knowledge anyway about what the programming system was. It appears, it looks to me like we were just there applying for money and getting whatever we could and directing it where the program made us. So as far as that kind of comparison, I don’t know that we were able to make that even.

Ian Record:

We’ve often heard this, this term thrown about with respect to this dependent economy -- which fortunately, we’re seeing a lot of tribes, including your own, moving very deliberately away from -- of the 'project mentality.' And it centers around the kinds of grants that you would get from the federal government that, that there wasn’t an overarching movement toward, you know, for tribal government. It was all essentially dictated upon what could get funded from one year to the next, and there was not kind of a strategic direction to the operation of government. Is that, that sounds a little bit like the story you just related.

Diane Enos:

It is, and a lot of that started to change in 1995 when we signed our self-governance compact with the federal government. And what we do now is, it’s demonstrative of where we’ve taken it, because what we’re able to do now is to manage and direct our own programs. We receive funding and of course, you know, in the recession we’re experiencing right now, that funding has become lesser and lesser, and we’ve relied more on our own tribal funding. But I always like to think about what kind of situation other tribes are facing, because we’re in a unique position. Because of our location, we have more opportunities, not only business development, but gaming as well. But with Self-Governance, the monies that we do receive from the federal government, we’re able to program those in according, kind of in tandem with what we’re able to provide as well. So that the program, programs that we create and further are a combination of our own resources and limited federal resources. But we’re able to decide how to spend those monies and where to direct those to what we see as a greater need.

Ian Record:

So, back in ‘95 you were on the council at that time, when you signed the self-governance compact.

Diane Enos:

Yes.

Ian Record:

And so, you know, we’ve talked to a lot of tribes that have gone that route, self-governance compacting, and leaders of those nations have talked about, you know, it was one thing,  it was quite one thing to actually make that decision and say We want to go Self-Governance do that compact and quite another to actually build the governing institutions you need to essentially carry out the expanded, the expanded ability to exercise your sovereignty, if you will, under that compacting system. Can you talk a little bit about the challenge that it presented for Salt River?

Diane Enos:

We’ve always, and I have to look back at the Indian Reorganization Act, and that didn’t happen too very long ago. At the time of the Indian Reorganization [Act], prior to that, we had a chiefs system and what it consisted of were representatives that were there in council and I will call it that to further the needs of the people as a whole. So the system of sitting down together, like we have today with the tribal council, is really not a new system. It’s just that when the IRA came in, it changed the process of how we do it because we have an IRA constitution. So, going into the self-governance process, signing the compact for us as a community was clearly, I think, it was not a big struggle for us to make that decision; it was something that we were eager to do. And I know at the time, former President [Ivan] Makil who is, and is still well known as a proponent of self-governance, was really critical in making us aware as a council of the need for us to, it’s almost like stepping back in time, and the term 'self-governance' is you take care of yourself and that’s something that tribes always want to do. We’re not any different in that sense. We know what’s best for us and I think that we always will. We’ve dealt with the federal government out of, we didn’t have a choice and I believe that that’s something that we’ve always looked forward to is the opportunity or at least the, how shall I say, the willingness, the desire, the drive, if you will, to be who we are and to be what we can be for who we are.

Ian Record:

So what were some of the formal governing institutions that the council decided was, and President Makil back at the time, decided was necessary following Self-Governance. Like, what were some of the governing, formal institutions you put in place to say we need this, this, and this if we’re really going to carry this out?

Diane Enos:

The compact that we signed then as time has passed has changed. Right, way back then, and forgive me for not remembering the specifics, but I do know that some of the programs we are now are responsible for are public safety, for instance, fire and police, education, health and human services, and we go back and look at some of the things we need to have done then are still the same needs we have now. But it’s like, it’s like, and I hate to use this term 'growth' because it really is 'regeneration' almost. So, those are the programs we, the initial push was to redevelop those programs.

Ian Record:

Let’s turn now to, let’s turn our focus a little bit more directly economic development. You mentioned previously that the purchase of the cement company was a key first move for the nation to essentially move from that dependent economy to one predicated on self-sufficiency. And since then, your nation has been very aggressive in developing essentially, what we like to call, a diversified or thick economy; where you have a robust mix of nation-owned enterprises and citizen-owned businesses. Why is creating a diversified and thick economy so important?

Diane Enos:

It’s common sense. It just makes sense, because you can’t put all your, what’s that saying? Putting all your eggs in one basket? They taught us that at BIA school, just kidding. It just makes more sense, because you never totally rely on one resource because you never know when that one resource is either going to dry up or not be there or become more challenging. And I mentioned earlier the opportunities we have here because of our location. We had the dry Salt River bed, so we had Salt River Sand and Rock developed at that time as well or a little prior to that; and we’ve had the opportunity to develop our own phone company. We also have, and I’m speaking of today, we have some land that’s very choice for leasing. So we’ve developed the Salt River fields, which is the Major League Baseball spring training. And obviously we’re a gaming tribe, so we’ve gone further and developed a resort. We’re looking at developing a hotel right now separate from the resort. We’ve got the Talking Stick Golf Course that the tribe is the developer on and that started in the very early 1990s. So diversity means that you get to have all these different pockets, these different sources of revenue. Oh sure, they present different challenges, but you get to do, it’s not just one game, it’s many games, if I could call it that. But the return, it’s like betting, almost. If you are a gambler, so to speak, you want to have different options, and it’s always good to have options in life because when one doesn’t come up, the other may be there, and so on and so on. It just makes better sense, especially for us, that are located, the location that we are in.

Ian Record:

So, within that mix of businesses, both those owned by the nation and those owned by your citizens, there are certain businesses that, I mean, makes more sense for the nation to own. Then there are other businesses that it makes more sense for perhaps a citizen to own. Can you talk about that dynamic and, you know, for instance are there certain types of businesses that maybe the tribe should think twice about owning? And maybe say maybe this is better for a citizen to own that kind of business?

Diane Enos:

I think that depends on the size of the business. For instance, some tribes go into farming and that’s something that we’ve been looking at. I think the more that time passes, if an individual wants to go into that, they’re going to have to have a lot capital. So, I would say that right now, what we’ve done to support small businesses is to really, to develop what is called Salt River Financial Services Institute, and that provides loans for people as a jumpstart to open their business. But as far as what should we, what should a tribe not operate. Well, I don’t think you want to get into things that have a moral question and, like massage parlors, things that take too much capital and they’re too risky. Obviously, again as I mentioned earlier, we’re a gaming tribe. And back, I believe it was 1987 again, the national Indian gaming act came into place, we as a tribe didn’t take advantage of that until the 90s. So it’s been a constant struggle but that’s an opportunity for us. Some people may say tribes should not be involved in gaming, but when you don’t have much else, what are you going to do? It’s one of the most regulated businesses. It’s more regulated than Las Vegas, I would say, so it’s been an opportunity for us.

Ian Record:

Within that, within the economic development arena, particularly with nation-owned enterprises, the Native Nations Institute has done extensive research. And one of the things we’ve identified as a key to success for nation-owned enterprises is effectively managing the relationship between business and politics. You know, your predecessor Ivan Makil, I know, said it very well. He said, you know, 'We’re unique among the governments of the world in that we’re expected to govern but also turn a profit. You know, we had that dual role where most of the governments, they’re not expected to generate economic development. That’s someone else’s job.' Yet, you have the dual role. How do, how can tribes effectively manage that relationship where business is business and politics is politics and not let the politics creep in, and how has your nation approached that challenge?

Diane Enos:

It’s always a challenge where you have humankind. I’ve thought about that a lot and I have to go back and think about what it must’ve been like for our ancestors, because collaboration and cooperation is critical to the survival of any people. You’ve got to look around, like where we live in the desert, we couldn’t have achieved what we did without a sense of collaboration and a sense of depending on each other for the interests of the group. We still have that mentality, I believe. So making money to help out our community is a job that we have and it has to be a challenge. Of course, you’re going to have politics; people are always going to want their personal interests, but I believe we’ve been able to, as best we can, deal with that by setting up what is called the enterprise system. We have several community-owned enterprises; they’re businesses. And what we’ve done is set a board for the enterprise directors. And we’ve balanced those boards out by putting on the boards professionals -- and they can be outside people who are not tribal members -- but also some of the members of the community who also sit on the board and they govern through the policies and the procedures and the interests of those particular enterprise boards. And they, in turn, report to council on an as-needed basis, but also ultimately in the ordinances they answer to the council. So, council answers to the people generally and I like to refer back to what’s called the political process. If they don’t like you, the people don’t like what you’re doing and they don’t like the way you’re doing it, they won’t re-elect you. It seems almost simple, but accountability is always going to be a challenge to any government. And I believe that we’ve done well to try to balance that out in our system.

Ian Record:

Right. So, the way you described your board is a description that we’ve heard from other tribal nations in terms of how they’re setting up their nation-owned enterprises and the relationship they’re formalizing between those enterprises and the elective leadership of the nation. That board is, from what you’re saying it sounds like it’s set up as a firewall to insulate the day-to-day operation of those businesses from any sort of political interference?

Diane Enos:

Right, because under our ordinances, which is our law, so to speak, the boards are set up to have oversight over management of the particular enterprises. Management answers to those boards and if there becomes a situation where it gets to council and it affects the interest of the community, tribal government as a whole, that’s where council has the authority and the oversight to step in, but that’s very rare, very rare. In fact, one of the things that I think a lot of boards have learned, and we’ve certainly learned, is to not, what we call, 'micromanage.' Because if you get into micromanaging, you take away from policy-driven decisions, and really that’s what the authority of the council is under our constitution is to develop and make sure that all the policies and the laws are followed. We can’t do that if we start nitpicking and getting into the little things, I call them little things, over business. You just can’t do that. That’s what the boards are there to make sure that management does. So in some sense, yes, there’s a firewall because it keeps that arm’s length unless there’s a critical situation.

Ian Record:

But the council and you, as a president, have a very vital role to play. You mentioned formulating those policies, establishing a strategic direction. I mean, you have a vital role to play to ensure that there’s accountability there, that those businesses are performing but on a, kind of a larger picture and that they’re carrying out the nation’s larger objectives, correct?

Diane Enos:

Yes, yes they report to council. In fact, we just finished a series of annual reports to council on budgets for all the enterprises. They come and sit down with council and present their budgets. At that point, and there’s several points, other points during the year where council sits down with these boards and asks, and management, and asks them specific questions: 'What are you doing in this area? Why are we seeing this over here? What are you going to be doing in the future? What are your projections as far as the health or the, on health of a particular enterprise?' We get to have those discussions periodically, and I think that that’s really important because they understand who is doing the oversight over them and we understand how we should not micromanage or try to stay away from micromanaging.

Ian Record:

Okay. So your nation has set up an economic development corporation called Salt River Devco. Can you talk a little bit about what the overall mission and goals of that corporation are?

Diane Enos:

That was initially set up to be a clearinghouse for economic development. When I say 'economic development,' I mean actually that. The community decided in 1991 that development, and when I say development I mean it’s building buildings, creating businesses, creating an enterprise area; that only ought to occur on the perimeter of the community. So Devco was set up to manage that and to be a clearinghouse for all sorts of proposals. It was also set up to be an asset manager. Not only do we have the Chaparral Business Park, we have a large lease -- I think it’s 120 acres if I’m not mistaken -- in that whole area there. We also have a signage, outdoor signage company. We also are looking to put other small endeavors under the Devco umbrella. And now as time passes, we’re starting to move towards the development of limited liabilities corporations under, I believe it’s Section 17 of the federal government’s regulations. So it’s a...you have to be flexible when you talk about the kind of enterprise development that we do, because things change and you have to allow for those changes to occur. And the developments of limited liability, LLC, let me just say that; LLCs have to be considered ultimately because what you got to do is you got to not only change with the times, but you have to protect the tribal government as a whole, protect that interest.

Ian Record:

We’ve touched on this a little bit, but I’d like to ask you a question directly about it and: How do you see your role and the role of the councilors at Salt River, the elected councilors, in terms of your nation’s enterprises? What is your fundamental role in terms of ensuring that those businesses take root and grow?

Diane Enos:

Are you talking about tribal businesses?

Ian Record:

Tribal businesses.

Diane Enos:

Under our constitution, the council -- and that includes the president and the vice-president -- have the responsibility to do a whole list of things for the people. And not only do we provide for court systems and for the laws of the community, but we’re supposed to take care of the people, essentially. So our role, as far as being in the positions we’re in, in order to take care of the people we have manage our assets. We have to take care of the assets. Not only taking care of those assets, but making sure that they grow. It’s kind of a fiduciary relationship. And you don’t have a fiduciary that just sits there on his hand, his or her hands. You have to be active and you have to look for more opportunities. And ultimately, the goal is to help your people, is to make sure that there’s a resource for not only the people that are alive today, but the people that are coming. So that’s essentially what I see our role as, as a council.

Ian Record:

You talked about the obligation that you have as president and the councilors have to the people of the nation. Let’s talk a little bit more about that. Can you speak to the role of citizen support in the development and operation of nation-owned enterprises? You know, it’s quite one thing if you guys as a group say it would be a good idea to get into this new business area, but it’s quite another to get the people behind that idea and to really support it, you know, long-term. What kind of, what kind of challenge does that present and how important is transparency and citizen understanding of the economic direction you’re going?

Diane Enos:

You have to, you have to have citizen support for any ventures that you do. You’re not always going to have 100 percent citizen support. You have detractors, that’s just part of, part of life. For instance, let me use the Salt River Fields examples. The idea came up pretty quickly and the council started discussing it. And obviously we knew it was going to take a lot of input in terms of capital, so we had to discuss how we’re going to do that. And right away we started talking about this idea to the people. We started putting the idea out in public, in public meetings. But this particular proposal didn’t provide enough, a lot of time. It’s like we had to make decisions fairly quickly. And those decisions, because they involve our finances and our resources, which are not public information because for a lot of reasons, some of the discussions that we had to have had to occur behind closed doors in executive session. So when this plan was finally unveiled, and I would say with pictures and what not, some of the people were saying, 'Why are you doing this? Why are you not asking us? Why didn’t we take this to a public vote?' And we had to tell them there wasn’t enough time to do that. We have to make some decisions; we have to make some commitments. So explaining that part of it to the public was critical. And the other thing that we still do -- we just had an update on the progress last week -- is to continue to have periodic updates and the resolutions that we pass towards the development, you know moving it to the next stage, were done publicly. Everything that we had to do, we have to tell the people why we’re doing it, and sometimes we have to just tell the people, ‘We don’t have enough time to take a community vote,’ and people have to understand that. And I’m sure there are still some people who don’t like that and maybe didn’t vote for some of us in this election because of that, but in order to get the confidence of the people you have to demonstrate a track record that shows stability and shows calculation and an ability to move towards transparency. It’s difficult to have total transparency when you’re a tribal government, because you have a lot of non-members, the out, let’s call them the outside world, who may be interested in your financing and your finances for many reasons. Some of those aren’t good reasons. So when we talk about transparency, you’re talking about money, but we’re also talking about process. The ability to tell, discuss those issues, we do and have done frequently with community member-only meetings, where if you’re going to come to the meeting you have to show your enrollment card. That’s, to us, the best way to be as transparent as we can, because it’s really our membership that has the most stake here at hand in any particular proposal.

Ian Record:

Let’s talk about another aspect of successful economic development in Indian Country and that is a neutral dispute resolution. And you have a, you have a legal background; you practiced law for many years so you have a keen eye on this particular area. Why is neutral dispute resolution important to successful nation enterprises?

Diane Enos:

Sovereign nations, tribes, cannot be sued because as a sovereign you have a shield around you. But people will not want to do business with you if you cannot, if they can’t take you to court, if you have an argument with them or if you have a dispute with them. What we’ve done -- and I know lots of governments have done this -- is having to do what’s called limited waivers of that sovereign immunity. Part of that, to do business with an outside entity, involves which court are you going to go to if you have a problem, if you have an issue. A lot of outside businesses do not, for many reasons, want to take a dispute to tribal court. So what we’ve done is set up an arbitration clause in our agreements, in I would say just about most of our agreements that we do with outside entities. That gives assurance to them that if there ever is a problem, that we have a process laid out where we can take a dispute and have it resolved by a third party. And it gives a lot of comfort, because you’ve got to have that in business and tribes have to understand, we don’t like it, every time we do the limited waiver of sovereign immunity. It makes us a little bit uncomfortable because we’re giving up some of our shield, but in order to properly advance our business interests it’s almost like, I’m trying to think of an analogy and it escapes me right now, but you have to consider the worst-case scenario in any, in any venture that you go into. What will happen if this worst-case scenario occurs? What are we going to do? And you always have to have, in the back of your mind, how are we going to protect the tribe, ultimately? And the arbitration clause is a way for us to achieve that.

Ian Record:

So there’s these disputes that tend to arise big-scale when you’re talking about, you know, you the tribe in a joint venture with an outside partner, say around a major development. Then there’s kind of the day-to-day, personnel kinds of disputes. I assume you’ve had to build in some, some neutral dispute resolution mechanisms for things such as personnel disputes that arise from one of your enterprises. I mean, that’s equally critical, is it not?

Diane Enos:

It is. It is because those enterprises operate in any kind of business relationship that they have to develop or whether it’s with a particular employee, there has to always be a way to resolve a dispute. Right now, I don’t know if you know this, crimes do not have criminal jurisdiction over non-Indians, but we still retain a measure of civil jurisdiction and authority over non-Indians so that if you have a non-Indian employee, we still have civil authority over their, over the conduct. And as you know, or you may or may not know, most disputes are civil in nature and when I say civil, the law’s divided into criminal and civil, so you have a forum to resolve those disputes with an employee and that would be tribal court or the human resources department.

Ian Record:

So how is your tribal court system grown? How has it grown and why has it grown in the fifteen years since you forged your self-governance compact?

Diane Enos:

The tribal court for any nation has to grow. With us, particularly, here, given our broad range of development here and the amount of employees that we have and the number of people that live in the community we have had to allocate more and more resources to the development and the strengthening of our tribal court. Tribal courts really are a strong basis of our sovereign authority here, because they spell out directly the power that the tribe has. If you can take somebody physically into custody, adjudicate a matter against them and jail them, I mean it seems to me short of execution there is no greater example of authority over a person, and we have that authority over all Indian people that live here or come here and we all also have had to develop our police department so that we’re able to exercise the state’s authority in certain areas of the community. But our tribal court has had to be flexible. We’ve instituted some changes. What we do now is we’ve opened up the application pool to sister tribes to become judges so now you don’t just have to be from Salt River to be a sitting judge here and they’re appointed by council. You could be a member of the Tohono O’odham Nation, the Gila River Indian Community or the Ak-Chin Indian community because we have a lot of the same cultural values and systems. That’s one example of how we’ve grown.

Ian Record:

So in terms of trying to foster an environment for the success of your nation-owned enterprises, your citizen-owned businesses, what key laws and codes and policies have you put in place?

Diane Enos:

One of the big things we’ve done recently over the last several years is the procurement policy. And what that does is it enables certified tribal member-owned businesses to move ahead in the line. If there’s a contract that is to be let out by the tribe they have preference: tribal member-owned businesses and then Native-owned businesses and then other owned. And what that does is it enables them to, if you can get certified -- and certification has certain requirements to make sure that this isn’t tribal member owned business –- then it’s only proper that they step ahead of our people in the process. And again you’re going to look for how the service benefits the tribe and you have the spin-off benefit that occurs when you have a tribal member-owned business get priority.

Ian Record:

Okay. So one of the things you did, one of the things the community did a few years back was zone the entire community, in terms of its land, and you developed what is referred to as the General Plan. Why did the nation decide to take that step and what impact has it had on your ability to develop economically?

Diane Enos:

The community’s been doing that for many, many years, prior to me ever coming on to council. And what it does is it sets our roadmap and the people have input through the council representatives. We have also had several meetings over a period of time where people are able to give their input. I mentioned earlier that in 1991 we had the vision meetings, strategizing, and right now we just finished, my gosh, probably about seventeen or eighteen community member meetings with various segments of the community -- the youth, the seniors, general district meetings, general meetings -- to ask the people, 'What do you want?' And what the result is is to impact the general zoning plan because it’s the citizens of the tribe that have to decide where development occurs, because we live here. And it’s the citizens of the tribe that have to decide where education’s going to occur and where certain things are not going to occur as well. Because where we live, we live right in the middle, almost in the middle of metropolitan Phoenix; we’re on the edge. We have to have a better handle. We have to make sure that the people feel like they have a say. And when I say 'they,' I’m one of the people. I like to sit back and think of myself as just a regular citizen and the things that would annoy me on a day, you know, day-to-day basis living here and the things that would make me feel comfortable here and my children and my family. Those are the things that continue to be important as time passes, and certainly if I see change occurring in my community that I don’t like, I’m going to say something about it. Conversely, I would like to be able to say something about what I want my community to look like.

Ian Record:

One of the things that struck me in reviewing the General Plan and the map that you’ve developed that shows where development will happen and not happen is the fact that you have a very, I think, confined area for development and there’s essentially a segregation between the development zone and the living zone, if you will, where development’s going to take place adjacent to Scottsdale and then where the people are going to live and carry out their lives and I assume that was very purposeful, wasn’t it?

Diane Enos:

It was and that started in 1991. It started prior to that, but it was formalized in 1991 with the creation of the vision statement. And the project that we are in right now and just finished the meetings that we had is called Vision 2020, because I believe we need to go back 20 years and sit down with the population of the people in the community and ask them. Well, the big push for that 1991 discussion was the development of the Pima Freeway. That was a very, very divisive issue. When the State of Arizona decided that it wanted to build a freeway on tribal land there were a lot of people, and I was one of them, that was told that was absolutely against this proposal because it was felt at that time and I still, I know that it was going to change our community and it has, but I also believe that once a decision’s made by the majority of the people, we have to fall in step with that we have to make the best use of it that we can. So back in 1991, the people knew that this freeway was coming and in fact it had I believe been decided on. So people started saying, ‘The intrusion into the community of the freeway, the 101 Freeway, we don’t want it to go any further, we want this to be the line right here.’ All the proposals for businesses, stores, retail, development and all other kinds of fixtures, I mean just call it that, are going to stay over there because we want to be able to walk down our roads and we want to be able to look at the sunrise and we want to be able to look at the mountains and we want to be able to have our children play in our yards and we don’t want no stores, no businesses, we don’t want a lot of things that economic development has -- we don’t want that in our backyard. It’s the ultimate 'NIMBY' ['Not in my backyard'] type of posture and I think we’re very happy with it.

Ian Record:

Several years ago your nation established a sales tax. What prompted the nation to establish a tax and where’s the money go? What benefits has it brought the nation?

Diane Enos:

Every government considers taxes and every government has to tax in one form or another. Whether it’s part of your crop, whether it’s part of your seeds, you know back in older times, and the tax that we levy right now on our own members is small compared to what the state levies. We don’t, we’ve had to do it as a matter of necessity. We don’t share in the revenue with the state and the county that is collected on state’s sales tax; tribes don’t. If we didn’t collect our own tribal tax, we wouldn’t get that money, and where that money goes, it goes into the general fund and it goes toward our general budget, our operating budget, it goes towards things like social services, police and fire protection, education, the cost of this building, the cost of paying our employees, just in the general fund it helps our government.

Ian Record:

And was there an education effort that needed to take place of your citizens to say this, we really need this?

Diane Enos:

I don’t remember when that tax was set up. It’s been so long and it’s just been a part of, part of our government. I don’t remember a specific time.

Ian Record:

I’d like to wrap up with a short discussion of small businesses -- businesses owned and operated by tribal citizens. Just a first, general question: how important an economic engine can citizen-owned businesses be for your nation and others?

Diane Enos:

As far as being able to provide government services, they pay taxes, but the other part of it that’s really important is that they can be employers of our people. They can, not only, what do they call, recycle the dollar in the community, but they also provide modeling for our youth and our children. Because if you’re going to go into business you’re not, you’re going to have certain qualities as an individual. You have to be able to take risk, but you’re also going to be able to manage what you have in order to be a success, in order to function as a successful business. And for our children to see our own people doing that I think that that, to me, that’s one of the best things to come out of seeing and supporting community member-owned businesses is that modeling. Because without it, you’re only seeing success and risks being taken by non-members and non-Indians and what does that say to a child? So that’s, to me, that’s the key concept.

Ian Record:

And it also gives them a sense of what’s possible in terms of their futures, their careers, you know. There’s other things out there than just maybe going into tribal government, getting a job there, or going to work for the casino.

Diane Enos:

Absolutely, Yup. They keep us on our toes.

Ian Record:

How does your nation work to cultivate and foster small businesses owned by your citizens?

Diane Enos:

We have what’s called the Salt River Financial Services Institute, which offers loans. We also have procurement policies, which provide preference to them for contracts. We have employee preference policies in place. We also have, there are businesses here from their own organization. In fact, I just met with one of the key officers in the Salt River business owners and encouraged them to come to council and have a dialogue with us: that dialogue has to continue because since tribal government sets up a lot of the regulations and frankly has the keys to some of the opportunities, we have to partner up with them. So the idea of partnering up with them is to figure out how we can do better as a tribe to encourage that growth and support that growth and how they in turn can tell us we can do that better. So it’s really a partnership that I’m anxious to see continue.

Ian Record:

So, you know, this thought process that you and your, that you and your councilors here at Salt River have about consciously incorporating small businesses as part of your overall economic development strategy, that’s not something that a lot of nations do. I mean, are some nations and nation leadership missing the boat by not consciously considering small businesses as part of the economic development process?

Diane Enos:

I would say if you don’t encourage and further small businesses you are definitely missing a boat there. And what I mean by that is missing the opportunity to do those things we just talked about. You’re also not utilizing some of the best talent that your people have. You’re also failing to provide opportunities for tribal government, because if you encourage businesses to flourish and you encourage them to participate in a dialogue with you, they can tell you how you can do your business as a tribal government better. And that’s your own people talking to you. So, yeah, I definitely think that the pluses far outweigh the minuses there. So, yeah, you’re missing a big boat.

Ian Record:

As you mentioned earlier, you’re also keeping those dollars when you have those local outlets for spending by your people, you’re keeping those dollars circulating within the community.

Diane Enos:

Absolutely. You’re keeping employment within the community and just making more opportunities for your own people, ideally.

Ian Record:

Well, President Enos, we really thank you for your time and thank you for sharing your experience, wisdom and knowledge with us.

Diane Enos:

Wisdom? [Laughter] I don’t know about that.

Ian Record:

Well, that’s all the time we have on today’s program of Leading Native Nations. To learn more about Leading Native Nations, please visit the Native Nations Institute’s website at nni.arizona.edu. Thank you for joining us. Copyright 2011. Arizona Board of Regents.

Honoring Nations: Mark Graham: Navajo Nation Sales Tax

Producer
Harvard Project on American Indian Economic Development
Year

Mark Graham, former executive director of the Office of the Navajo Tax Commission, presents an overview of the Navajo Nation Sales Tax to the Honoring Nations Board of Governors in conjunction with the 2005 Honoring Nations Awards.

People
Native Nations
Resource Type
Citation

Graham, Mark. "Navajo Nation Sales Tax." Honoring Nations Awards event. Harvard Project on American Indian Economic Development, John F. Kennedy School of Government, Harvard University. Tulsa, Oklahoma. November 1, 2005. Presentation.

Mark Graham:

"As Amy mentioned, my name is Mark Graham. I am Tsenabahitnii born for Irish so I am Sleep Rock clan of the Navajo people born for the Irish. My father is Irish. And I am here on behalf of the Navajo Nation, the Office of the Navajo Tax Commission to present the Navajo Sales Tax. The Navajo Sales Tax is one of our newest taxes, the seventh in our line of taxation that we currently have on the Navajo Nation. Before I make any presentations, I always like to stress Buy Navajo. Without Buy Navajo I don't have a job. There's no businesses; if there's no businesses, there's no taxation. So I always stress Buy Navajo. The two areas that I always stress though is the sales tax and the fuel tax because these are tax revenues that come back to the Nation for use by the chapters in the case of the sales tax and then the fuel for our roads and so I really stress the importance of buying Navajo. Now of course this could apply to all of the nations here in their enactment of their own taxes and thus Buying Native is very important.

The history of the Navajo Sales Tax began actually 10 years before this. It had been drafted and had sat on our shelves for years and years because no one wanted to take the initiative to enact it. Everyone wanted to get reelected. No one wanted to take the initiative, put their name on the line and actually enact it. In 2000 we actually then had that leader, President Kelsey Begaye, take the initiative to put that out there and he directed my boss at the time, Mr. Ray Etsitty, to go out and hold public hearings on this and that's what we did. We started with the five agency offices that we have on the Navajo Nation and we got comments back and here's a packet of those. Then after receiving those comments we thought, 'Well, what about the youth, we should find out what our youth want.' So we went to the five major high schools on the Navajo Nation and this is comments from just one of the high schools tackling then just the juniors and seniors in that class. We then also went to the two higher education facilities there on the Navajo Nation and this is the Crown Pointe Institute of Technology and also then the Dine College to gather their input and thoughts on the sales tax. A lot of the comments were, 'It's good that you're going to tax but this is what you should do with it.' And so we had a lot of those kinds of comments and it was really then good knowledge as we went forward.

Now of course then we had gathered this information and then no one on the legislative side wanted to address it yet. So it sat on our shelves again for about another year at which point we then made a presentation to our government services committee, which is our oversight committee. They approved it and the following week it went through two other oversight committees and then the Navajo Nation Council before approval. It was enacted in...it was passed on October 2001 and became effective April 1st, no kidding, April 1st, 2002. Sales tax, why would we want to do a sales tax? Well, we needed to look at ways to diversify our current income. With the Navajo Nation about 75 to almost 80 percent of all the revenue that goes into our general fund comes from our natural resources so we really needed to look at ways to diversify ourselves so that we could not have to fully rely on our natural resources because as everyone knows, natural resources are depleting and we at Navajo have really started to see that. And then the next thing, the most important thing then is we were trying to comply with what we called the Local Governance Act where we were trying to give all of our local chapters, 110 of them, the ability to be their own government and as such we were trying to find them money so that they could become their own government and really then develop themselves even further.

With the development of the sales tax, the statute in Section 620 has a revenue allocation and this is where we really then, in our own tax statute, identified where we wanted to take the revenue and where it was going to be spent. And so as you look at Section 620 sub item B and C it talks about the revenue that would go back to the chapter. This is where within the sales tax we identified whether it was a retail sale in an established facility or a non-retail sale like construction activity. All of the retail sales were easy to identify because they were in a stationary place and thus we could identify what chapter that revenue was generated and so that's why we had this breakout. Item B talks about those chapters that do become local governance certified and so they get all of the money upfront, all of the other money then is put into a special pot and divided up based on the fund management plan. In development of this fund management plan the two areas that I wanted to highlight was Section 4, the distribution and how then we identified how chapters, those local communities, could spend that money. Initially what we had looked at with the sales tax was that the money would come back and be used for infrastructure and economic development. By starting a wheel of economic development and infrastructure, we wanted to see more businesses being developed there and thus more money coming in. Now, as our Navajo Nation Council then reviewed this they had the infinite wisdom that there are 110 chapters out there, not all 110 are going to have businesses so why don't we include just this one extra phrase, 'other government purposes' that then those chapters that probably will never have businesses develop in their community boundaries then have the ability to spend it in other areas and so we included that as part of the fund management plan. The last one then, Section B, talks about how that revenue once it's in that special fund is divided up like a lot of other revenue to chapters based on what we call the 50/50 formula. Fifty percent of the revenues divided equally amongst the number of chapters, the other 50 percent then is divided up amongst the voter registration within that chapter. And so the bigger chapters really benefit from the larger number of registered voters in their boundaries.

This slide then talks about how much revenue was collected in our fiscal year of 2005 and then distributed just last month with the new fiscal year. As you can see at the end here, the total revenue we collected was $4.8 million just from the retail side. If you include all of the non-retail, that was $14 to $15 million from the activities occurring on the Navajo Nation. We then as is broken out, we based that sale, wherever that sale occurred, in that agency. So we have a central agency, eastern, Fort Defiance, northern and western and that revenue then is kept at that agency and then distributed within those chapters. This really highlights some of the huge economic differences in the agencies just on Navajo. As you can see eastern, that's not a typo. Eastern has basically very little economic development as opposed to the other three agencies that we have and so they get very little money generated and thus get very little money going back to them. This is then a map of the Navajo Nation. You can, the colors are kind of off but the whole side there is our western agency, this red area is our northern agency, this purple side is all of our eastern, the green is the Fort Defiance and then that middle blue is our central agency. Those areas that are a little bit darker, there are six areas, those are our more economically developed chapters and so those are our big chapters where all of the revenue basically comes form and looking at all of the revenue about 80 percent of the revenue generated from the sales tax comes from those six areas.

Now this is the total revenue that we've collected over the last three years. As I mentioned, we enacted it in 2002 so over these last three years, just the revenue going back to the chapters has been $12 million and a lot of these chapters then have really used that to their benefit. This then shows one of the other discrepancies that occur, as I mentioned, the 50/50 formula. And what it shows is the fact that of the amount of revenue going to the central agency most money goes per chapter to an agency that has very few chapters in it. They have fewer children to feed basically because they have fewer chapters in their boundaries. The next area then shows what eastern agency looks like. As I mentioned earlier, it has very little business going on out there but it's also then the largest agency that we have and so these chapters get very little money going back to them and that's really important as we move forward in these other areas. Another interesting aspect of it as I mentioned, those chapters that become LJ certified, one of the big chapters that I highlighted previously is then the Tuba City chapter. When that chapter down below becomes certified, they take a huge chunk of the revenue that is generated because they get all of the money off the top of the bucket. And so they get $332,000 last year. That was for only two quarters of revenue. So this year they're projected to take over 75 percent of all the revenue generated in the western agency, which will greatly affect the other 17 chapters in this agency. Some of the chapter use of the revenue that they've had we have out in the Fort Defiance agency environmental assessments. We've had our chapters use it for power line extensions, waste disposal fees that also occur in the central agency. They also have purchased back hoes to help in their development of their facilities, bathroom extensions. The last two chapters then, our agencies are important because as I mentioned, a lot of chapters then haven't spent their money, especially in the eastern agency. When you only get $8,000 a year, you tend to want to save that and so that's what they've been doing, saving it for the big projects that they want to tackle in the near future. And so with that, I'd like to close my presentation and am available for questions. Thank you."

Michael Lipsky:

"Thank you very much for your presentation. There's no sovereignty without a stable source of revenue, so I'm particularly interested in your program. I also notice how much I've learned about the complexity of the Navajo Nation simply by looking at those charts and seeing how diverse the chapters are. I was interested in your experience with collecting the tax because tax administration and the efficiency of a tax is only as good as people's willingness to voluntarily submit the correct amount. Then there's the enforcement question to make sure that people are motivated to do that. So could you talk about the administration of the tax system either from your experience or going forward?"

Mark Graham:

"I appreciate that question, and normally my presentation takes 45 minutes to an hour and I include a lot of those areas. We have been in place and actually one of the previous presentations talked about being established since 1978. That's how long our office, the Navajo Tax Commission, has been in place and the Navajo tax codes have been in place. So there's been a lot of experience over the last years in administrating and monitoring all of the revenue coming in. And since that time with the enactment of this newer tax, we've felt very comfortable in working with the taxpayers out there, but it did quadruple our tax base. We went from small...or from large companies that were doing a lot of business to small companies that were doing small amounts of business throughout the reservation. But we feel that with especially the retail side, we have high compliance because we know all of the businesses that are going on out there and thus we're able to monitor that and the returns that they have. One of our statutes is called the Uniform Tax Administration Statute and that really gives us the teeth then to do field audits at a taxpayer's place of business. We then issue assessments for additional tax interest and penalties and we feel very comfortable with those and taxpayers have respected the assessments that have been issued and thus pay not only the tax due but any assessments that they may be issued."

Brian C. McK. Henderson:

"I have sort of a related question, and usually when you introduce a tax there tends to be a dampening effect on the overall economic activity of a country or region. And the question is, do you know what the GDP is of the Navajo Nation and related to that, has there been any effect by the introduction of this tax on reducing or flattening the overall GDP growth of the nation itself?"

Mark Graham:

"I don't know right off hand what that rate was for the Navajo Nation either before or after the enactment of this tax. But what we do have is a division of economic development, that they have an economist who each year over the last five years has developed a profile of the Navajo Nation and when we enacted the tax and started to gain information from those tax returns, he asked to verify that and he felt that the information that we were gathering was very close to where he had already projected as an economist the activity of the Navajo Nation. So to go back and say whether this tax has dampened any of the activity, I don't think so, but it has then given us information to say, 'That's exactly where we're at, that's where we always kind of thought the number of...activity that was going on out there anyway.'"

Elsie Meeks:

"Since you're distributing all of the proceeds from the tax, there isn't really any net to the tribe, tribal governance, the general fund it sounds like, and you don't even take administrative fees out of that."

Mark Graham:

"If you went back, if I were to go back to one of the previous slides, you'd notice that we have what we call some set-asides that we take off the top. By Navajo law, we have to take 12 percent off for our permanent trust fund and actually if Mr. Zah was here, he was the leader under which this was enacted, so that any of the revenue that came in would be set aside, especially from the natural resources. So as time went on and those resources depleted, we'd have something to help in the funding of that, of the Navajo Nation government. So that is taken out. We also then have right now at a rate of half a percent a special tax administration suspense fund, a liability account for any kind of liability, tax liabilities that may arise from our initiating the tax. And so those two are the current percentages that get taken off the top, just from the retail side and then the retail, the net proceeds then go out to the chapters. Now from the non-retail, the construction and other activities, all of that then deposits into the general fund, so there's a siphoning off between the two."

Elsie Meeks:

"So my second question then, did this money that goes out to the chapters now, did that replace funding that had already gone to them I assume?"

Mark Graham:

"No, it hasn't. This is an additional pot of money for them. But in the near future that may be something that might be pursued because of budget constraints that the nation will be facing."

Brian C. McK. Henderson:

"Just a closing comment. I think it's great that you've introduced this as another means by which government can allocate resources and do it on an equitable basis, but I want to challenge you for the future and maybe think as hopefully you continue to grow, the Nation continues to grow and you may want to appeal to the Irish side of you for the simple reason that as you probably know, Ireland today is the lowest taxed country in Europe. In fact, it has the lowest corporate income tax in the world, which is 10 percent and it has the lowest individual income tax as well. So as a consequence to that, the Irish government has probably one of the largest growing biotech, technology and financial centers growing today in the world. So I challenge you to kind of play into some of those experiences and maybe, who knows, we might find a different presentation up here sometime."

Mark Graham:

"Right. No, that's a really good comment and actually Navajo has a real low income tax, 'cause we don't charge one and then as far as our sales tax, I think that was one of the selling points is it's only three percent as opposed to all the other border towns, which were six and a half, almost seven percent. So we try and maintain that low rate for our consumers. Thank you."

Honoring Nations: Mary Etsitty: The Navajo Nation Sales Tax

Producer
Harvard Project on American Indian Economic Development
Year

Mary Etsitty, Former Executive Director of the Office of the Navajo Tax Commission, discusses how and why the Navajo Nation sales tax was established, and how the Office of the Navajo Tax Commission works to consult and educate Navajo citizens about the need for -- and benefits of -- generating governmental revenue through a sales tax.

People
Native Nations
Resource Type
Citation

Etsitty, Mary. "The Navajo Nations Sales Tax." Honoring Nations symposium. Harvard Project on American Indian Economic Development, John F. Kennedy School of Government, Harvard University. Cambridge, Massachusetts. September 27-28, 2007. Presentation.

Michael Lipsky:

"And our final speaker will be Mary Etsitty, the Executive Director of the Office of the Navajo Tax Commission."

Mary Etsitty:

"Yá'át'ééh. Good morning. My name is Mary Etsitty and I'm Diné from the Navajo Nation. So, greetings from Navajo land. I'm actually from Arizona; the Navajo Nation is also partly in New Mexico and Utah. I'm here today as a representative from the Office of the Navajo Tax Commission. In 2005, we were an honoree from the Honoring Nations and [I'd] just like to thank the committee here again for that honor. It was very special to us and I'd like to thank Amy [Besaw Medford] for inviting me to be here today. This is a very wonderful experience.

We were given our award in 2005 because of our sales tax. The Navajo Nation has actually had taxes for many years. Back in the 1970s is when we initiated our tax program. We were not successful in collecting taxes until about 1985 when we had a Supreme Court case, Kerr McGee vs. the Navajo Nation. So ever since 1985 our office has just been going full force in collecting taxes. Last year, we collected a total of $85 million for the year, and although the overall budget of the Navajo Nation is greater than that, we're just striving to get to the point where we are basically sustaining ourselves. We do have seven taxes right now. Our original five taxes are based almost solely on the natural-resource industry because Navajo Land has coal mines, we have oil and gas leases, we have pipeline property, we have electric generation, and we collect a lot of money in royalties and taxes from that type of industry. But what happened in the late 90s is, we had a leader at the time whose name was Kelsey Begaye, and he was kind of looking into the future for us. And he said, ‘You know, we're not always going to be able to sustain ourselves on natural resources so we need to look at other areas for generating revenue.' So he encouraged our office to start looking into some other taxes, and that's when we looked into fuel excise tax and the sales tax.

We have actually always been taxed on fuel except before 1999, the states of Arizona, Utah, New Mexico were collecting those taxes and it was not coming back to the Navajo Nation. So we adopted our fuel excise tax and there's a credit we have against the states. So we collect our own money on the Navajo Nation and the states, in some circumstances, they give us refunds. We kind of work it all out with them and we have very good relations with the states at this point. And so that was our fuel excise tax. And then right after that was our sales tax that we initiated. And with these two most recent taxes, the leaders within Navajo, they knew that what was going to happen, ultimately, is these taxes -- fuel, excise and sales tax -- were eventually going to come down to the Navajo people. Although technically legally the burden is not on the buyers, that's how our sales tax is set up. It's on the sellers, and for the fuel it's on the distributors, but they do ultimately pass it down to the consumers, the Navajo people.

And so our leaders back in this time thought, ‘We need to know what the Navajo people think.' And actually, the executive director of our office, at the time, kind of foresaw this as well and he -- just from the beginning of our fuel excise tax and our sales tax -- he sent us all out. I was working as a staff in the office at the time and he literally sent all of us out into the field. The Navajo Nation is approximately 27,000 square feet; it's a very big reservation. Oh, I'm sorry. I always say that. I'm sorry. I always say square feet. [27,000] square miles. Anyway, so we're pretty big. And there's only like 20 of us in the office and so we all get sent out to talk to the public, to hold these public forums, and find out what the Navajo people think about taxes; and so we did this for our fuel tax, and then later on, for our sales tax. And what we found out was that, within Navajo land, many of the people were in favor of being taxed. They really didn't mind. They said, ‘I think we should contribute to the government as long as we're going to benefit and our communities are going to get this money.' So it was actually kind of good to hear that from the people. Although, when we would talk to the business owners it was a little bit different. They were not real happy about it. But, in general, the people were. So that kind of helped us to move along our effort and keep pursuing the sales tax. And these public forums that we held helped us to structure our sales tax and it told us that we need to get the money back to the communities. That's what the Navajo people want.

And so what we did was -- we kind of compiled this report that said we went out and talked to as many Navajos as we could, as many people that live on the Navajo Nation, and they want the money to go back to their communities. So the executive director of Tax Commission at the time -- he's an attorney, also, so he was able to get all this legislation together and structured it so that the money that comes from retail establishments within the Navajo Nation will go back to that area. There's kind of some calculations that you have to go through but the money is there for the chapters. We call them chapters with the Navajo Nation because we are so big; we're split up into 110 chapters. Chapters are kind of like the local areas where people go to get information about the government. So the money does go back. And it's not real specific at this time how it gets spent, but it's supposed to be spent on government purposes. Another thing about our public forums is that I think, at the same time, Kayenta Township was also becoming very noticed because of their sales tax initiative. So I think people on Navajo Nation saw that as a very positive thing and so they were in favor of Navajo Nation sales tax. Our sales tax rate is at three, or it was at three percent for the first few years. And what we did was we studied the sales tax rates of the surrounding communities around the Navajo Nation and we kept our rate relatively low compared to some of the border towns around the Navajo Nation. And surprisingly, people on the Navajo Nation didn't really, it didn't really affect them when we started our sales tax. I would talk to people just in the public and ask them, is it changing your spending habits and they all said, 'No.'

Most recently, within the last year, our judicial committee from our legislative body decided that they needed more money to build more courts and more jails. So they said, 'Let's try to get some of the sales tax money.' And so what they proposed was to increase our rate to four percent and then to keep that additional, or to keep 25 percent of it, which would essentially be that extra one percent. And so the judicial committee, judicial and public safety committee, they wanted to do this. And so they brought it before the overall Navajo legislative body. And the first time they approached our council, our council said, ‘No, we need to know what the Navajo Nation people think. It's going to affect them, ultimately.' So they pretty much sent the judicial committee out to do what our office had done originally, which was go out and hold public forums and find out what the Navajo Nation people think. So within the last year, I assisted the judicial committee and the public safety committee and we essentially did the same thing. We scheduled forums at some of the chapters within the Navajo Nation and we met with residents and basically informed them of some of the needs of the judicial branch and the public safety branch of the Navajo Nation, and asked them what they thought about us increasing the rate and having that money go to those specific activities. And again, Navajo people were in favor of it. They said, 'Why not increase it [to] two percent instead of just one percent.' So they were again, they liked the idea. They said, 'As long as we know that our money is going to go to a good cause and it's going to help people in general, then we are for it.' So once we compiled all that information again, [we] went back to the overall legislative body and explained to them what we had found out by talking to the people. And then it passed. So as of July 1st of this year [2007], our sales tax rate is now four percent and that extra [one] percent is going into a special fund to supplement our judicial and public safety facilities.

As of right now, we really haven't gotten any negative feedback or negative comments on it so it's going very well. The way our sales tax is set up, it actually, we have a range that we can go between two and six percent. That's the way our sales tax statute is written. So I think in the future, we're probably going to have more offices and other legislators coming to us and saying, ‘Let's increase it some more.' As far as I know, right now, Navajo people are generally in favor of it. Their main concern is just, ‘Let's make sure the money is spent well.' That's one area that -- it's kind of out of the hands of my office, as far as how money is spent. We really just concentrate on generating revenue, bringing in revenue and making sure our taxpayers are filing and paying the correct amounts. But it would be very good overall for our government to show how tax money is being spent. So with our sales tax money, some of it does go back to the communities. And with our fuel tax, that all goes into a roads fund that the Navajo Nation Department of Transportation oversees. Again, people in general are in favor of that because they know where it's going, they see where it's going, and it's going to help them, ultimately.

So that's kind of the Office of Navajo Tax Commission's story of civic engagement. Is -- we kind of have no choice but to go out there and talk to people because people, in general, in Indian Country, they just are not familiar with taxes at all. I'm not sure, but I think Navajo Nation probably has one of the most extensive tribal tax programs at this time. We try to help out other communities and other tribes that want to set up their taxes. We've made it a point, ever since our sales tax, within my office, to go out and educate people, especially people on the Navajo Nation. Before our sales tax, a lot of people didn't even know that we had taxes because it never came down to them to pay anything. We've really been educating people. Every time we are asked to do a presentation, we go out and explain all of our taxes as much as we can.

One of the things that we've started doing also is, every year -- I'm not sure how it is here, but out in the west we have fairs, have rodeos and the whole big parade and all that stuff. So every year now, during fair season, we put together surveys and we go out and we talk with people and get information from them and try to educate them at the same time. A lot of them are very glad to hear what the Navajo Nation is doing as far as taxes. And again, a lot of them are in favor of it. That's always a good thing for us [because] we're used to being not really liked by business people. We're not always the most popular people at meetings and stuff like that. So that's what we've been doing and I just wanted to show -- this year what we did was we found this really cool promo item and it has our logo; we have a logo called Buy Navajo. And this is actually another interesting story. About three or four years ago, the Office of the Navajo Nation President sponsored a contest. The president said, ‘We need to have people spend their money on the Navajo Nation. Let's try to have people not spend so much in the border towns.' And so he said, ‘Let's make up this logo called Buy Navajo.' And he had a contest for someone to come up with a design for this logo. I think it was a young man out of Shiprock, New Mexico that came up with our logo, and it's basically a corn stalk. And unfortunately, this is really small for people to see, but it's a corn stalk and then it has the four sacred mountains that Navajos have in the southwest. So we promote the Buy Navajo campaign. We try to tell people, ‘It's important to spend your money on the Navajo Nation, buy your groceries, buy your gasoline on the Navajo Nation, because that tax revenue will stay on the Navajo Nation.' So that's another example of civic engagement. As our president said, ‘Let's get all the people involved in trying to come up with a design for us, for the Navajo people.' Oh, okay, I'm sorry. It's called a view-tainer. It's just a container, you can buy these at Home Depot and it's just a really cool-looking container to put stuff in. We kind of saw it like as a little piggy bank maybe and you can put change in it.

So this year at the big Navajo Nation Fair we had just a brief survey that we were doing and we were just asking people, ‘What's the Navajo Nation sales tax rate?' We want to know if people are current on their information and then we asked them, ‘What's the sales tax rate in the nearest border town?' And that would be Gallup, New Mexico, if you're in Window Rock. And then we asked them, ‘Where's the last place you shopped at? Where's the last place you bought your fuel?' And so right now we're compiling that information. It's just also to make people a little bit more aware of where they do shop and just make them aware of taxes in general. What we did was we just put our own information inside the view-tainer so when people filled out the survey we would give them the container and then inside it had some of the answers like to some of the sales tax rates of the surrounding cities, counties, states.

That's what we do to try to educate people because, even with the general United States population, there's a huge misconception that Native people do not pay federal income taxes. So I would just like to ask all of you to please try to talk to people and let them know that that's not true. I attend a lot of tax conferences, and even people that work in the tax industry, they have that misconception. It's all about educating as far as taxes are concerned. I thank you for listening to me and I think maybe taxes are kind of boring for some people but it's actually very interesting to some of us on Navajo land. So thank you."

Navajos pass higher tax on junk food

Year

The Navajo Nation Council, in its weeklong winter session, passed a tax on junk food and eliminated a tax on fresh, healthy foods Thursday.

Denisa Livingston, a healthy food advocate, worked with about 75 other members of the Diné Community Advocacy Alliance for the past two years to pass the 2 percent additional tax on sugary sodas and packaged snacks like doughnuts and chips, bringing the tax on those foods to 7 percent...

Native Nations
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Citation

Olmstead, Donna. "Navajos pass higher tax on junk food." Albuquerque Journal. January 31, 2014. Article. (https://www.abqjournal.com/345559/navajos-pass-higher-tax-on-junk-food.html, accessed February 3, 2014)