Ghost of Great Wolf

Many La Conner School District voters and most of its students live in homes on land that the district does not tax. We were told the so-called Great Wolf Lodge decision by the U.S. Court of Appeals for the 9th Circuit in 2013 is why more than 930 homes, mostly in Shelter Bay, were removed from the county tax rolls in 2015.

That decision applied to Confederated Tribes of Chehalis Reservation vs. Thurston County. In that case, the tribe is the majority owner of the Great Wolf Lodge buildings that sit on its land.

In 2008 Chehalis sued Thurston County over taxes levied on the buildings. The county won in the U.S. District Court and Chehalis appealed to the 9th Circuit, which overturned the county’s win in 2013. Thurston County cut its losses and did not appeal to the U.S. Supreme Court.

In La Conner, something besides Great Wolf led to the tax disparity that exists today. A public records investigation for stories I wrote in 2016 shows that unelected state bureaucrats in the Department of Revenue with the help of tribal attorneys, including lawyers working for the Swinomish Tribe, crafted an interpretation of the Great Wolf ruling.

Their interpretation that Great Wolf prohibits taxes on buildings on tribal land regardless of ownership went out in a Department of Revenue property tax advisory to all county assessors in the state. Assessors in Snohomish and Skagit counties, unaware of the tribal involvement, considered it a dictate from the state agency and took all leased reservation land parcels off their tax rolls.

In our county it shifted a $1.8 million tax burden to the remaining taxpayers. Some La Conner area homeowners saw property tax increases approaching 25 percent.

Now, years later, the notion that all non-tribal interests on leased tribal land are tax-exempt is actually being tested in the 9th Circuit.

Agua Caliente Band of Cahuilla Indians vs. Riverside County started with the California tribe suing the county government over taxes levied on non-tribal members who lease reservation land in Palm Springs.

Agua Caliente lost the case last year when the district court ruled in favor of Riverside County and, like Chehalis, the tribe appealed to the 9th Circuit. Oral arguments on that appeal are scheduled in January.

The possessory interest tax Riverside County assesses on non-tribal members for the value of their leases and structures on reservation land helps fund essential public services, including police, fire and schools – just like in Shelter Bay before 2015.

But in California, the county officials aren’t backing down from a court battle with tribal lawyers