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Originally published Sunday, March 20, 2005 at 12:00 AM

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Tulalips' Quil Ceda Village may get share of sales tax

If state senators agree, the Tulalip Tribes retail development Quil Ceda Village could begin receiving at least $2 million a year in state sales-tax revenue.

Times Snohomish County Bureau

If state senators agree, the Tulalip Tribes retail development Quil Ceda Village could begin receiving at least $2 million a year in state sales-tax revenue.

The state House of Representatives voted 93-3 this month for a bill that would allow the village to levy taxes like a city.

Under the bill, the tribes would collect the municipal portion of sales taxes on purchases at stores in Quil Ceda Village, including Wal-Mart, The Home Depot and an outlet mall scheduled to open in May.

State Rep. John McCoy, D-Tulalip, a tribal member who is general manager of Quil Ceda Village, said it's an "equity issue." The tribes have spent more than $80 million on police and fire protection, roads, sewer lines and other infrastructure in Quil Ceda Village but don't get sales-tax money to help pay for the projects, as cities do.

Currently, the county and state split the sales taxes collected at Quil Ceda Village. If the bill is approved, it would cost the county about $12 million over the next six years, according to a state analysis. That's not counting sales at the tribes' new outlet mall.

The tribes would start collecting the tax in July.

Despite the cost to the county, County Executive Aaron Reardon and County Council Chairman Gary Nelson said they are officially neutral on the bill. No one testified against it during a House committee hearing Feb. 22.

Nelson said the council agreed not to lobby against the bill because of a good-faith agreement with the Tulalips. He conceded, however, that he opposes the bill because of its effect on the county budget.

Council Vice Chairman John Koster, R-Arlington, whose district includes the reservation, also opposes the bill. Besides the hit that Snohomish County would take, he said, the bill could result in any tribe creating a retail development, calling it a town and keeping the tax money.

"The impact to local government is big," he said. "We don't have $2 million to say, 'Yeah, it's $2 million — we'll just cut it loose.' "

State Rep. Kirk Pearson, R-Monroe, and Rep. Dan Kristiansen, R-Snohomish, were among the three representatives who voted against the bill. Both said they did so because of the effect on county government.

"It's a considerable tax shift away from the county," Pearson said. "I think it's too much too fast and too big a hit for the county."

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Rep. Doug Ericksen, R-Ferndale, Whatcom County, cast the other "no" vote.

Thirteen House Republicans who opposed the proposal last year changed their votes this year. GOP Rep. Bruce Chandler of Yakima County said he reversed his vote after no one testified against the bill in the committee hearing. He said it helps that the arrangement would be a pilot project.

"At this point, I think we will all just keep an eye on this situation and see how it works out," he said.

The bill is now before the Senate Ways and Means Committee. It passed the House last year by a slimmer margin but stalled in a Senate committee.

The bill's sponsor, Rep. Ross Hunter, D-Medina, said the policy would help the tribes and protect customers at Quil Ceda Village. A state attorney said the tribes have the authority now to impose an additional sales tax on customers at stores on the reservation, though the Tulalips don't do that.

Kim Halvorson, who lost to McCoy in last year's election, expressed concern about the bill. The village has no residents, she said, so the tribes are providing citylike services only for customers.

She said she is concerned because the Tulalips would collect state tax dollars but wouldn't have to make their expenditures public because tribes aren't subject to state public-records laws.

"There's no accountability about where those tax dollars will be spent, and we have no say in the tribal government," she said. "It's taxation without representation."

Hunter noted that the tribes can collect taxes now and that the records aren't public. He added: "I'd be concerned about that, but I can't fix it because I can't mandate that." He said he hoped the tribal government would submit itself to public-records laws similar to the state's.

McCoy, whose legislative district contains the Tulalip Reservation, said Quil Ceda Village meetings are open to the public, though he wasn't sure whether the tribes released budget documents and other records. He said the public would be able to tell its dollars were being spent well because of the services the tribes would provide.

Emily Heffter: 425-783-0624 or eheffter@seattletimes.com

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