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Casino transfer expected to affect 2005 budgets
SUQUAMISH For residents, it means an increase in property taxes. For local taxing districts, it just happens to be bad timing for their 2005 budgets.
Since news of the Suquamish Tribes intent to transfer the 12.72-acre parcel that houses the Clearwater Casino from fee-simple status to trust status surfaced last week, public agencies that depend on property tax income have been busy figuring out how it would affect their finances this year.
For 2005, the tribe was expected to pay more than $458,000 in property taxes if its in fee-simple status. If the property is transferred into trust status, which means its held under ownership by the federal government, then the property gets taken off the tax rolls the day the transfer takes place. The county would be paid a pro-rated amount of when the property was fee-simple in 2005.
The bad news is that if it happens within the next few months, it would create some financial strain on local agencies that expected to have that money for this year. But the good news is that for most of them, they would only be affected in 2005.
Taxing districts affected,
but only for this year
Audrey Newell, the public relations manager for the Kitsap Regional Library, said the transfer could cost the library system up to $15,000 in operating revenues this year.
While that is practically pocket change in terms of the organizations $8.4 million operating revenue budget, $15,000 still means something, including a part-time employee or 625 books. Although the system will need to prepare for the change if it happens, Newell said it will just require some minor adjustments.
But in future, the county would redistribute its funds to make up for the loss, she said.
North Kitsap School District would face a similar situation, as it is slated to receive more than $144,000 this year from the casinos property taxes, said NKSD director of finance and operations Nancy Moffatt. The district would lose about $12,000 a month in 2005 if the transfer took place right now.
On the positive side, if the property leaves the tax rolls, the district is eligible for federal impact aid funds which would cover the cost of the children whose parents work at the casino, which would amount to about $61 a student. Currently, the school district receives $1 million in impact aid for children of Navy personnel and those who live on Native American trust property because neither of those communities pay property taxes.
However, the NKSDs impact aid survey has been completed for 2004-05 and if the transfer happens, the district may have to apply to amend its impact aid needs.
Unfortunately, the impact aid doesnt equal property (taxes) its less, Moffatt said.
But the following year, the amount would be covered by all the taxpayers in the district anyway, she said.
Moffatt and Suquamish Tribal Chairman Bennie Armstrong agreed that the school district and the tribe have a very solid relationship, as the tribe donates a considerable amount of money to help out, Moffatt said.
But she would still like to sit down with the tribe and discuss mitigation if needed, she said.
North Kitsap Fire & Rescue Fire chief Paul Nichol said because 90 percent of NKF&Rs operating revenue comes from property taxes, any change will impact the district more than any other government entity. The district doesnt receive state or county funding or sales tax.
While the loss of the tax revenue will affect the 2005 budget, it wont be any different than how the district has been affected since Initiative 747 was implemented in 2002. The initiative limits the amount taxing districts can raise their property tax levies to 1 percent year. The total amount of property tax the district receives from the casino, approximately $70,000, is more than the annual increase they are allowed under the I-747 cap.
The loss of the casino wont affect our 2006 and beyond budgets because levy rates for everyone will be adjusted (to) compensate for the casinos removal from the rolls, Nichol said.
Republican party says
transfer is unfair
The Kitsap Republican Party has taken a stance on the issue, especially since the failure of last years Initiative 892, which proposed to allow the same type of gaming in tribal casinos to be conducted in non-tribal establishments. A portion of the proceeds would have helped lower property taxes.
A statement sent out by the party last week commented that in a county that is already suffering from a lack of commercial tax base, its irresponsible for the tribe to take its land off the tax rolls in its commitment to the countys economy.
But the casino alone is an economic asset to the community, explained Tribal spokesman Leonard Forsman. Clearwater Casino, which is run by the tribes economic branch, Port Madison Enterprises, employs about 600 people and supports local suppliers and vendors by purchasing their products.
The casino is beneficial to the economy, regardless of land status, he said.
The Republican party also stated that schools will be affected by the removal of the $458,000 from the tax rolls and for the Suquamish Tribe to ask our children to sacrifice to subsidize its gambling profits is reprehensible.
This one has a fundamental unfairness about it, added Party Chair Matthew Cleverley of Suquamish. Its probably one of the most obvious issues of unfairness in the process.
His group believes that Port Madison Enterprises shouldnt be padding casino profits at the cost of our children, he said.
Armstrong feels that bringing children into the issue isnt fair in the first place.
I think thats a little brutal and a little unfair, he said. The tribe supports the school system annual with Appendix X funds, which are portions of the proceeds from the casinos electronic gaming machines. For 2003 and 2004, the tribe gave the district $140,000.
Were (going to) continue to support local schools with Appendix X funds, Forsman said.
The tribe supports education one step further by picking up what NKSD doesnt provide for its native youth by spending another $250,000 to $300,000 on its own education programming, Armstrong said. Port Madison Enterprises also has a program in which it donates funds to local tribal and non-tribal groups.
I believe we are giving more, it (just) doesnt look like on the tax rolls, Armstrong added.
Forsman said the tribe would be willing to discuss matters with groups who are concerned about the financial impacts.