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50 Years Ago: Court sides with Arizona on state tax issue

The Navajo tribe received terrible news this week from an Arizona superior court judge who ruled in favor of the state on the question of whether Navajos living on the reservation had to pay state tax.

Today, it seems like a no-brainer since tribal members for decades have been exempt from state taxes if they lived on the reservation, but back in 1970, no one knew for sure what the law was.

Navajo tribal attorneys were certain that tribal sovereignty trumped state rights while state officials were sure that state rights should prevail. What everyone could agree upon was that it would be a long fight in both state and federal court before the issue would be resolved.

In 1970, the court battle had just begun and tribal officials were saying that they would not be surprised if the tribe lost the first few rounds because of a bias in the state court system against tribal rights

Rosalind McClanahan had filed a lawsuit the previous June against the Arizona Tax Commission arguing that only her tribal government had a right to tax her since she lived on the Navajo reservation. At that time, the tribe imposed no taxes whatsoever on anyone who was from the tribe.

A ruling in superior court in St. John’s 50 years ago this week, however, denied that claim.

The ruling said that the power of the state to tax income of tribal members was not detrimental to the sovereignty of the tribe and argued that in the long run, the imposition of the state tax would prove to be beneficial to the tribe because it would speed up the tribe’s integration into the political and economic culture of the state.

Attorneys for McClanahan within hours of the ruling said they would appeal on the basis that only the federal government has the right to tax members of the tribe living on the reservation, along with the tribal government.

They pointed to several U.S. Supreme Court decisions that upheld the sovereignty of tribal governments and even brought up the Treaty of 1868.

McClanahan was being represented by DNA but tribal attorneys were keeping a close eye on the proceedings. So far, DNA was being given good marks by the tribe on how it was handling the case.

Navajo Tribal Chairman Raymond Nakai said the lawsuit was one of the most important lawsuits dealing with sovereign rights because if the state won, it could pave the way for the state to impose its will on other aspects of life on the reservation which would create severe problems for the tribe in the long run.

The Navajo Tribe in 1970 was operating on a budget of just more than $16 million, most of which came from mineral royalties and leases. There was some talk of the tribe imposing its own sales tax on goods sold on the reservation but Nakai was opposed because he felt it would affect his ability to be re-elected.

In other news, 1970 would see tribal elections being held for Navajo Tribal Chairman and members of the Navajo Tribal Council and the Navajo Times management had decided to make a major effort to get as many tribal members registered to vote in the tribal election as possible.

According to the BIA’s Office of Vital Statistics, there were about 54,000 tribal members over the age of 21 who were eligible to vote, the biggest number in tribal history. Of that number, 34,318 were registered to vote.

Publicly, the tribal government was also supporting this effort but privately, Nakai was telling tribal election officials not to make a major effort to get more young members of the tribe to register to vote.

His reasoning was simple. He expected that Peter McDonald, who was head of the Office of Navajo Economic Opportunity, would eventually join the race and he was worried that a bigger youth vote would make him the victor.

Nakai was confident he had the elderly segment sewed up since many were members of the Native American Church. Because of his efforts to get peyote legalized for NAC ceremonial use, the church had endorsed his candidacy.

The youth vote was a different matter. Nakai believed Navajo young people looked upon him as odd with his wearing of sunglasses even indoors because of an eye condition, and because he couldn’t relate to their issues.

By 1970, many Navajo youth were speaking out on issues such as discrimination in border communities and the lack of recreational activities on the reservation. Tribal programs seemed to exist only to serve veterans and the elderly and no one seemed to care about the needs of the young Navajos.

Yes, there were tribal scholarships, but there was only enough money in that program to fund a few scholarships a year. It was also a fact that only a small percentage of Navajo youth were going to college at that time.

From interviews over the years with people involved in Nakai’s various campaigns, it appears that he did not visit many schools or youth events during his time in office and when he did he had a hard time thinking of what to say,

He was a great deal happier spending his time at chapter meeting and holding rallies, both of which drew only a few young people.

Another problem was he had no one on his staff who could relate to regional young voters although he was being encouraged to hire some young Navajos to work for the chairman’s office that summer, which he did.

About The Author

Bill Donovan

Bill Donovan has been writing about the Navajo Nation government since 1971 and for the Navajo Times since 1976. He is currently semi-retired and is living in Torrance, California, and continues to report for the Navajo Times.


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