The 'Bennett Freeze': Will Sales Taxes Help Tribes Bounce Back From A Development Ban?
A pair of proposals at the state Capitol would allow some Arizona Native American tribes to keep a percentage of sales tax revenues collected on reservation lands. That money could then be used for public safety and economic development projects.
The bills differ over the amount of money the tribes would be allowed to keep: one proposal would set aside half, the other 15%.
The measures are partly the result of the recent closure of the Navajo Generating Station, which was a major source of jobs on the Navajo Nation.
The Navajo Nation and the Hopi Tribe were also, until recently, subject to a ban on development under what was known as the “Bennett Freeze.”
To find out more out that piece of history and how it’s impacted communities, The Show spoke with Mark Trahant, editor of Indian Country Today.
What exactly is the Bennett Freeze?
It goes back to a dispute between the Navajo and Hopi tribes going back really several generations. There was a lawsuit in 1962 called Healing vs. Jones, and it established this idea of a joint use area for both tribes instead of dividing the land. And the commissioner of Indian Affairs of the time was a guy by the name of Robert Bennett, and he decided to institute a freeze so that neither tribe could get ahead of the other in terms of development. It was also tied into mining, even mining that predated that, going back to 1919. And it set really a bizarre set of rules in place for how each tribe would develop land.
The Bennett Freeze was appealed during the Obama administration, correct?
Yes. It had been talked about for years to have some sort of lifting of the Bennett Freeze, but it actually was in the Obama administration, which was able to get that to happen.
What has the impact been?
Well, it's one of the poorest areas of both the Navajo and Hopi. And one of the really extraordinary things, I think, is that you start with a base of having a really complex layer for development anyway. You have to go through archaeological rules. You have to go through the Bureau of Indian Affairs process. It's a complicated endeavor anyway to develop. And then that's just lays on a whole additional layer of complexity. Lifting it was supposed to spur economic development and a little bit having to spend some housing projects and certainly some new energy projects. But for the most part, it still has this complicated premise ...
Under this proposal in the Arizona Legislature — there are a couple of them with varying percentages of allowing tribes to keep a percentage of the tax revenue they collect on the reservation — would that make it easier for them to develop? Especially given that the Bennett Freeze is now done away with?
Well, I think the broader context is important, and that is that a lot of states have worked out really complicated and beneficial tax agreements across the country. Some where you've seen, for example, there's a tribe in Nevada — the Nevada Indian Colony — that has land right in Las Vegas, and they are in Reno, and they've been able to develop shopping centers and stuff. And this was a tribe that didn't have a lot of natural resources, but they were able to do that using tax policy. And so I think, however the tax policy unfolds, it could be a benefit, because it allows, really, folks to come in with a certainty and knowing the tribe also will have a revenue stream.