Lawmakers challenge analysis of reservation revenue, services
BRODIE FARQUHAR Star-Tribune correspondent | Posted: Saturday, November 13, 2004 12:00 am
LANDER n It will take "a monumental sales job" to convince state lawmakers to provide a severance tax credit for oil and gas produced on the Wind River Indian Reservation, says state Sen. Robert Peck, R-Riverton.
But such a measure faces better odds than getting the Legislature to give the Shoshone and Arapaho tribes $283 million, Peck said.
"The odds of that happening are comparable to being able to predict the Second Coming," Peck said during a meeting of the Legislature's Select Committee on Tribal Relations this week. "It just isn't going to happen."
A 2003 study commissioned by the tribes shows that Wyoming has gained a net tax revenue of $283 million from the Wind River reservation, over and above the costs of state and county services that go back to the reservation. The tribes are using the analysis to try to convince the Legislature to create a severance tax credit for taxes paid to the state from reservation production. Such a credit would allow the tribes to boost their own severance taxes, without harming the bottom line of energy companies.
House Speaker Fred Parady said the odds for the severance tax credit bill would improve dramatically if it would not take away revenue from Fremont County. Revenue from ad valorem taxes on most reservation mineral production goes to the county.
The analysis was developed for the tribes by Mark Berkman of Charles River Associates, based in Oakland, Calif. Berkman's analysis estimated the revenues derived by Wyoming and Fremont County from the reservation, and expenditures by Wyoming and Fremont County for services to the reservation from 1979 to 2002.
The estimate assumes that revenues from reservation oil and gas were placed in interest-bearing escrow accounts over that time period n much like the state's Permanent Mineral Trust Fund. The cumulative worth over the period 1988-2003 would be $46 million.
Berkman's methodology and assumptions were vigorously challenged by the legislators, especially Sen. Cale Case, R-Lander, who is also an economist.
"I can't let this pass unchallenged," Case said.
Berkman said that while it was not perfect, the analysis was a fair approximation of the situation and could be a useful tool in debating whether the tribes are getting all the help they need from the state and county governments.
Parady said he didn't want the economic analysis to become "a wedge between us. I want to deal with the facts."
Looking at revenues from the reservation in 1988, the total was $10,994,507. That same year, the reservation saw $9,312,165 in state and county services.
In 2002, revenues from the reservation had grown to $18,580,424, while state and county expenditures for the reservation were tabulated at $17,558,688.
Allison Sage, a Northern Arapaho Business Council member, said the tribe is providing a range of services to its members that save money for the county and state.
"Our revenue source (oil and gas) is eroding, and we've got to turn that around," he said.