Government officials in Lake County are preparing for spending cuts next year after the Confederated Salish and Kootenai Tribes announced they will not help offset the loss of more than $1 million in tax revenue from its recently acquired hydroelectric dam on the Flathead River.
Earlier this fall, the tribe acquired the Kerr Dam, since renamed the Salish Kootenai Dam, in a deal more than 30 years in the making. Prior to the transfer, the massive hydroelectric facility was owned by Northwestern Energy and contributed about $1.2 million to the local tax base every year. However, those payments have stopped because the tribes are not required to pay state and local taxes.
Earlier this year, the Lake County Commission and Lake County School District asked if the tribe would voluntarily pay about $1.2 million annually to the entities as a “payment in lieu of taxes.” In a press release from the tribe, officials said they “weighed many important factors” before deciding against the payments.
“This investment marks unchartered territory in the business world for the CSKT, and like any new business owner, CSKT remains cautious in committing financial resources in a depressed energy market,” officials said in a press release. “Given the challenging economic climate, the Tribal Council has decided it is imprudent for the Tribes to commit to payment in lieu of property taxes as related to the dam.”
However, tribal officials say they could change their mind in the future. The press release also noted some of the financial contributions the tribe already makes to the local economy.
County officials said they were not surprised by the tribe’s decision, but they were disappointed.
“This is going to fall on the backs of the taxpayers,” Commissioner Bill Barron said.
According to the commissioners, Lake County’s annual budget is about $25 million, with about $12 million coming from local tax revenues. The remainder comes from state and federal grants. More than $600,000, or about two-thirds of the money paid by the dam’s previous owner, went toward local schools, according to property tax statements provided to the Beacon. Money also went toward the county’s general fund, road and bridge repairs, and public safety. The commissioners say they will be able to raise some mill levies to compensate for the losses to the general fund. But that cuts will have to be made elsewhere, like the Sheriff’s office, because those mills cannot be raised.
“County departments will need to brace for the fact that they may have to let some people go,” Barron said.
Commissioner Gale Decker said the cuts will have to be made early next year and that the commission wants to work with the public to determine the best way to move forward.
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