Tribe and agencies wrestle with taxing issues

The Swinomish Tribal Senate has pretty much put the kibosh on the possibility of tax refunds for the 931 La Conner area homeowners whose property is coming off the county tax rolls next year.

What hasn’t been finalized is the level of funding the public entities who rely on those tax revenues will receive in the future and how much of the tax burden could be shifted to the remaining property owners.

Under state law, people can request tax refunds for up to three years. There were five people whose buildings are on leased tribal land in Shelter Bay and in the Pull & Be Damned Road neighborhood who actually filed for refunds, said Dave Thomas of the Skagit County Assessor’s Office.

Of those, three have already withdrawn their refund requests following the Swinomish Indian Tribal Community Senate’s action that essentially claimed the taxes the county already collected on those newly tax-exempt parcels going back to 2011.

During the past week, the Skagit County Commissioners, and the governing boards of the La Conner School District and Fire District 13 approved agreements with the tribe in which the tribe grants them the tax money the county already collected on their behalf.

So with the issue of refunds seemingly off the table, future funding for the nine entities that were receiving property tax from structures on leased tribal land is the next question to be decided.

While people whose homes are on leased reservation land that is held in trust by the federal government have never paid taxes on the real estate their homes sit on, they have been taxed on the value of the structures they own.

That all changed with a federal court ruling that structures on tribal trust land cannot be taxed by anyone but tribal governments.

Now that the tribe saved the school district, fire district, county and other agencies from being forced to issue refunds, the remaining taxpayers left to carry the funding load can breathe a little easier — the refunds would have come out of their pockets in coming years.

Still, there are questions that remain unanswered — like whether the remaining taxpayers will be stuck with a bigger share of the bills.

Swinomish has promised that Shelter Bay is not going to be a “tax free” zone, and the Tribal Senate is working on a property tax code to fund public services in 2015 and future years.

Each taxing entity must now negotiate its own agreement with the tribe.

“Our concern now is if the tribe is going to contribute to some of those tax districts, will the districts request a lower budget,” when they turn in their claims for property tax revenue to the county next month, said Thomas.

If, for example, the tribe kicks in the $106,000 Fire District 13 stands to lose in revenue from the 931 now tax-exempt parcels, the agency would not transfer the shortfall to the remaining taxpayers, said Chief Roy Horn.

But the district needs to have an agreement with the tribe in place by Nov. 30, which Thomas said is the deadline for agencies to submit their levy requests to the county.

This year Fire District 13 levied about 75 cents per $1,000 in assessed valuation on parcels within its boundaries. Without the now exempt parcels, the levy rate on trhe remaining 2047 parcels would be 98 cents.

La Conner School Super-intendent Tim Bruce said he believes Swinomish is working to have its tax plan in place in time for the agencies to adjust their levies.

Thomas said a meeting held Monday with the districts and the tribe resulted in a consensus that everyone is working to avoid a tax shift to the remaining parcels.

There are other issues tribal and county officials must wrestle with, as well.

Among the now exempt parcels eight are delinquent in their tax payments, said Skagit County Treasurer Katie Jungquist. The county has been trying to get them to pay up.

If they don’t, the tribe will collect from them starting next year, said Will Honea, the chief civil attorney for Skagit County.

Also, there are 32 parcels among the 931 whose homeowners have senior tax exemptions, said Thomas. The Tribal Senate will also be determining the tax breaks for low-income seniors.