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WE Tribe, Mahnomen County should try to be neighbors again

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opinion Detroit Lakes, 56501

Detroit Lakes Minnesota 511 Washington Avenue 56501

The White Earth Band of Chippewa and Mahnomen County, which lies entirely within its borders, haven't been acting very neighborly lately.

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Not only has the tribe quit paying property taxes on its Shooting Star Casino and Event Center in the City of Mahnomen -- it is seeking a refund for property taxes paid since 1992.

If the tribe wins, local government in Mahnomen County will have to pay it nearly $10 million, plus whatever interest is set by the court.

That bill would be split among the county, cities, school districts, townships and other taxing authorities, including the state.

We're not talking small potatoes for Mahnomen, a county of just over 5,100 residents -- about two-thirds white and a third native -- with a poverty rate twice that of the state average.

The casino property represents more than 11 percent of the total net tax capacity of the county, according to Scott Knutson, an attorney with Briggs & Morgan in Minneapolis, who is handling the county's case in federal court.

While it would have been nice if the tribe would have just continued paying property taxes on the casino, it looks to us like the county brought some of its tax difficulties on itself.

The tribe quit paying property taxes on the casino land in 2006, after an appeals court affirmed its application to take the property into non-taxable trust status.

The tribe owed a total property tax bill of $932,000 in 2006 and $885,000 in 2007.

Instead of accepting the court decision, the county declared the casino property tax delinquent in 2007. The matter first went to state tax court, then after several months the tribe pulled out of state court and filed a lawsuit in federal court claiming it was exempt from property taxes and was entitled to a refund dating back to 1992.

The county and other taxing entities were hurt by the loss of Shooting Star revenue starting in 2006, but that loss was greatly offset by special state funding of $600,000 granted that same year.

The legislation skipped 2007, but the $600,000 annual payment kicked in again this year and will be provided on a permanent basis.

Knutson said the costs of the casino far outweigh its economic benefits to the county. He said a fiscal impact study done by Springsted of St. Paul put the costs of direct and indirect county services to the casino at $700,000 a year, while it brings in just $150,000 a year in additional property taxes.

Of course, that's not looking at payroll, which has a huge impact on the area.

At any rate, here's what needs to happen: The two sides need to get out of federal court and go back to mediation.

The county should accept the casino's trust status, even if it isn't quite official yet, and the tribe should drop its claim for a refund back to 1992, which would pose a great hardship to the county.

The tribe and the county are neighbors, and should start acting like it again -- the sooner, the better.

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