October 21, 2014

Tribal leaders challenge decision to not extend tobacco compacts

 

“These negotiations  and compacts have been to the advantage of the state,” Muscogee (Creek) Nation Principal Chief George Tiger said. “We profess to be sovereign, but the state has jammed their sovereignty down our throats.”

 

STROUD, Okla. – Dissatisfied with her response, a group of Oklahoma tribal leaders are challenging Gov. Mary Fallin’s decision to not extend tobacco expiring compacts.

“These negotiations  and compacts have been to the advantage of the state,” Muscogee (Creek) Nation Principal Chief George Tiger said. “We profess to be sovereign, but the state has jammed their sovereignty down our throats.”

On March 18, 22 tribal leaders signed a letter to the governor’s office, requesting current compacts be extended through August 2017. Tobacco compacts for 28 of Oklahoma’s 39 federally recognized tribes expire June 30. Despite tribal leaders’ request for a response by April 3, Fallin replied via email on April 4 that her office would only grant short-term extensions to tribes that are still engaged in “serious good-faith” negotiations with the state on June 30.

In response, the United Indian Nations of Oklahoma, Kansas and Texas sent a letter to the governor’s office Tuesday, requesting an explanation by April 30 as to why Fallin has not been participating in the negotiating process and why extending existing compacts is not an option. Fallin’s general counsel, Steve Mullins, has been the state’s lead negotiator in compact talks.

“Compacts are complex legal documents that both the governor and tribal leaders negotiate through lawyers,” Gov. Fallin’s spokesman, Alex Weintz said. “General counsel Steve Mullins serves as the governor’s lawyer.”

So far, only two tribes, the Kaw Nation and the Concho government of the Cheyenne and Arapaho Tribes, have signed new compacts this year, which take effect July 1. Neither new compact includes most favored nation clauses or border tax rates, which the governor’s office has publicly come out against. Under the current compacts, lower tax rates are available for tribal smoke shops within 20 miles of Oklahoma’s borders with Arkansas, Kansas or Missouri, which have lower tobacco tax rates than non-tribal Oklahoma smoke shops.

Under the expiring compacts, tribal smoke shops within 20 miles of Oklahoma’s borders with Arkansas, Kansas and Missouri can sell cigarette packs with either a 6-cent or 25-cent tax stamp in order to better compete with lower excise taxes in those neighboring states. Compacted tribal smoke shops outside that 20-mile radius sell cigarettes with either a 52-cent stamp or an 86-cent stamp. Tribal smoke shops without a compact and non-tribal tobacco retailers must sell cigarettes to the public with a $1.03 stamp.

Both agreements call for the state to eventually receive half of the tax revenue from the tribes’ tobacco sales, a move that several tribes are not interested in repeating.

“I’m not even going to think about a 50-50 deal,” Tonkawa Tribe President Don Patterson said. “It is not even in my mind.

“My starting point is 25 percent. I might be willing to come up a percent or two – not more than that. I might get 50 percent forced upon me but I am not going to negotiate for that. I would be willing…to negotiate it up to 35 percent over five years to where it would be a 65-35 division, but no more than that.”

Based in north central Oklahoma, the Tonkawa Tribe has three smoke shops, all of which sell cigarettes at border rates.

The organization, which counts more than 30 tribal governments among its members, is also asking the governor’s office to confine the negotiations only to tobacco compacts at this time. Both the Kaw Nation and Cheyenne and Arapaho Tribes signed burn ban agreements with their tobacco compacts earlier this year. During their tobacco negotiations last year, the Muscogee (Creek) Nation was approached about other potential compacts with the state but declined.

“When we negotiated our tobacco compact, we said it would be only that,” Muscogee (Creek) Nation George Tiger said. “We were asked about other potential agreements and said no.”

Weintz said the state did not initiate discussions about burn bans but that Gov. Fallin “looks forward to entering into similar agreements with other tribes.”

Member Login