Survey of Native Nations elevates tribal public financing

In many arenas, information about ourselves and our peers can help us communicate our unique circumstances and consider growth opportunities. The same is true in the public finance sphere. When tribal, local, and state governments are empowered with information on how their revenues and expenditures compare to those of similar governments, they can use those data to identify financial opportunities and communicate their economic contributions and needs to constituents and policymakers alike.

Local and state governments have benefited from robust public finance benchmark data since the 1950s. Data-collection initiatives of the U.S. Census Bureau—such as the Annual Survey of State and Local Government Finances and the Census of Governments—have provided these governments with comparison figures for assessing their public finances and public employment relative to peer governments.

With these data, a state government could, for example, look at the extent to which neighboring states rely on various tax sources such as property, sales and gross receipts, licenses, and income. A city government, in turn, could compare its allocation of payroll expenditures across categories such as police, fire, corrections, and public welfare to those of similarly sized municipal governments. Researchers can also use these data in analyses to help state and local policymakers make better, more informed decisions. For tribal governments, however, these data have not been available.

In conversations about the Center for Indian Country Development’s (CICD’s) work to address harmful economic data gaps in Indian Country, we heard from tribal leaders across Indian Country that they need better information to explore and communicate financial and economic development opportunities with lenders, funders, and other decision-makers. Access to the kinds of objective data and analysis long made available to other governments would be a new tool for tribal governments to advance their economic self-determination and prosperity.

In its role as a neutral, independent research institution, CICD launched a first-of-its-kind initiative to make benchmark public finance data available to tribal governments—in a way that honors the crucial importance of tribal data sovereignty. The Survey of Native Nations aspires to equip decision-makers across Indian Country with relevant, ready-to-use financial data that inform evidence-based policy choices. Findings from a recent survey pilot illustrate the types of data that will be available through the Survey of Native Nations—and underscore unique attributes of public finance among tribal governments.

Pilot survey data are “a powerful tool”

In the summer of 2023, CICD opened the pilot Survey of Native Nations to tribal governments in Montana. Following approval by their tribal councils, five of the eight federally recognized American Indian tribes based in the state completed the survey over the summer and fall. Each participating tribe designated one primary respondent with access to the secure survey. This primary respondent could, in turn, designate up to two additional representatives to help complete survey questions. Survey designees provided information through a safeguarded survey platform specific to the Federal Reserve System.

CICD requested revenue and expenditure data from fiscal year 2019 to provide a baseline before the fiscal turmoil of the COVID-19 pandemic. Tribes were free to decline to provide specific dollar amounts on any survey question, giving tribes vital control over the information they provided. After the close of the survey window, CICD provided each participating tribal government with an individualized report showing their data with relevant and—crucially—confidential comparisons. Benchmarks included comparisons to all pilot-responding tribal governments (in aggregate), nearby county governments, the state government, and local governments nationally.^* As owners of their data, participating tribal governments chose how to use and whether to share their tribally identifiable individual results.

“Our Survey of Native Nations report serves as a powerful tool in shaping the interactions between our tribe and funding agencies,” said Chairman Frank Whiteclay of the Crow Tribe of Montana (Apsáalooke Nation). “By having a report like this, we can finally educate these agencies about our economic contributions and deficiencies, unique needs, strengths, and aspirations. This informed dialogue paves the way for more meaningful partnerships, resources, and support that align with our tribe’s vision for sustainable development and self-determination.”

Data gathered through the initial survey pilot illustrate—for the first time—the unique attributes of public finance in a tribal government context. Select findings give tribal leaders an idea of the types of information available through the Survey of Native Nations—and offer other policymakers insights into the distinctive strengths and challenges of public finance in Indian Country.

Government-owned, for-profit businesses provide vital revenue stream

Results from the Survey of Native Nations pilot reinforce the vital importance of tribal enterprise revenues to tribal governments. Due to taxation constraints and flat federal funding, tribal governments have increasingly relied on tribally owned enterprises in recent years, with the number of tribal enterprises outside of gaming growing significantly. Tribes own businesses in both tribal and non-tribal areas and across a wide range of industries—from federal contracting to gaming to utilities. For many tribal governments, including pilot participants, revenue transfers from tribally owned enterprises help fund critical government services and diversify the tribe’s income streams.

In addition to providing essential public goods, tribally owned enterprises serve as dynamic economic actors. They purchase goods and services from other businesses, attract visitors to their communities, and provide employment opportunities for tribal citizens and non-citizens alike. In some geographies, tribally owned enterprises represent significant regional employers.

Four of five tribal governments participating in the pilot Survey of Native Nations reported revenue transfers from tribal enterprises or joint ventures. These transfers made up 9 percent of all reported revenues. In contrast, such government-owned, for-profit businesses are not a major funding mechanism among other forms of government—a difference reflected in the omission of this funding category from comparable U.S. Census Bureau surveys of local and state governments.

Revenue streams vary greatly across participating tribes

Results from the pilot Survey of Native Nations reinforced that participating tribal governments receive revenues from a suite of other sources—with some similarities and considerable variation. This range in revenue streams may reflect efforts to economically diversify as a means to long-term economic resilience and stability.

Other important revenue sources—reported by four of five tribes—included investment income; sales and service revenues; and revenue from the TERO (Tribal Employment Rights Ordinance) program, which requires that employers operating businesses on reservations give preference in employment, contracting, and other business activities to qualified Native Americans. Similarly, three of five received revenue from license and permit fees, private donations, rent and lease revenues, and royalties.

Despite these similarities, revenue streams differed across participating tribes—reflecting their unique characteristics and contexts. For example, only two tribes reported revenues from gaming fees, self-insurance revenue, and settlement income. Only one reported revenue from transfers or distributions from joint ventures or similar investments. Such differences are consistent with the varied landscapes of tribal communities and economies, even within a single state.

Taxes contribute a relatively tiny share of tribal revenue

For state and local governments, taxation provides a critical mechanism for funding their operations and essential public goods—from police and fire protection to transportation infrastructure. Tax revenues can be raised and spent flexibly to fund the needs identified by the taxing government, in contrast to funding streams such as government grants, which are often restricted for specific uses. Tribal governments, however, face constraints to exercising taxation authority, including restrictions on taxing certain kinds of businesses and sales transactions within their reservations. In tribal communities, the risk of dual taxation—which occurs when more than one government levies taxes (or has the authority to levy taxes) on the same transaction—can also make it more difficult for tribal governments to use taxes as revenue tools, for example by creating business uncertainty that stifles economic activity.

Results from the pilot Survey of Native Nations reflect this reality, with participating tribes overwhelmingly relying on revenue streams other than taxation. For pilot participants, taxes reflected less than 2 percent of the total revenue reported across all responding tribes. As shown in Figure 1, taxes reflected 37 percent of revenue for local governments in Montana, 36 percent for the State of Montana, and 46 percent for all local and state governments nationally that same year.

Participating tribes also reported receiving tax revenues from a limited number of sources. Four of five tribes reported motor fuels tax, three reported tobacco products tax, and two tribes reported each of alcoholic beverages tax and property tax. None of the responding tribes reported collecting corporate income, individual income, general sales or gross receipts, severance, or other taxes—sources that, by contrast, each account for between 2 and 16 percent of state and local governments’ revenues nationwide.

All tribes reporting any tax revenues had intergovernmental tax agreements in place, establishing clear tax processes in areas where tribal and state tax authority overlap. For example, through a tax compact, a tribal government and a state government might agree to collect only one tax on transactions where dual taxation authority exists and then split the tax between them on a designated basis. Tax revenues collected through such intergovernmental agreements accounted for 95 percent of all tax revenues reported by participating tribes.

Tribal, local, and state governments rely on intergovernmental transfers

Whereas revenue shares from enterprise transfers and taxation differed across government types, revenues from intergovernmental transfers accounted for a sizable portion of revenues among tribal, local, and state governments alike. These transfers include grants and programmatic funds distributed from one governmental entity to another. For example, they might include federal support transferred to a tribe for housing or transportation, or state support to a tribe for broadband infrastructure.

Among all state and local governments nationally, intergovernmental transfers accounted for 19 percent of revenues in fiscal year 2019. While Survey of Native Nations pilot data are insufficient to report an exact percentage of participant revenues attributable to this income source, intergovernmental transfers also provide a vital revenue source for tribal governments.

For tribal governments, however, the sources of intergovernmental transfer revenues differ markedly from city, county, and other local governments. As shown in Figure 2, nearly all (96 percent) of intergovernmental transfer revenues reported by pilot participants came from federal sources, compared to only 16 percent among local governments in Montana and 11 percent among local governments nationally that same year. In this respect, responding Montana tribal governments’ intergovernmental revenue mix most closely resembles the state’s, for which federal sources make up nearly 100 percent of transfer funds received.

These differences likely reflect the federal government’s trust responsibility to tribes, defined in longstanding treaties and laws. For example, as part of its trust responsibility, the Indian Housing Block Grant program provides funding to help eligible tribes develop and maintain affordable housing.

“Federal funds for tribes are a necessity and a trust responsibility. Without these funds, tribes would have a hard time providing and deploying the necessary programs that help tribal citizens with basic needs,” said Gerald Gray, chairman of the Little Shell Tribe of Chippewa Indians, a participant in the initial survey pilot. “The Survey of Native Nations may help illustrate the persistent federal funding gaps that complicate tribes’ ability to support the well-being of their citizens.”

The role of state government transfers as a revenue source differs starkly between tribal and local governments. Apart from federal sources, responding tribes reported the remaining intergovernmental transfer revenues (4 percent) as coming from the state; no intergovernmental transfer funds were reported to have come from local governments. In comparison, the share of intergovernmental transfer revenues from state sources was 84 percent among local governments in Montana and 89 percent among local governments nationally the same year, reflecting the relationship and authority that state governments have over local governments within their boundaries and the reliance on state funding that follows.

Tribal governments manage and fund a wide range of public goods

Expenditures reported by tribal governments reflect the wide range of public goods and services they provide. Like other forms of government, tribal governments fund public expenditures such as education, health care, roads, and bridges. However, in ways that set them apart from other forms of government, tribal governments also fund tribal-specific activities such as language preservation, cultural programs, and elder assistance. Tribes’ public investments benefit tribal citizens and other individuals living both within and outside of the tribe’s home geography. For example, tribal government investment in infrastructure such as roads and dams benefits individuals, businesses, and communities on and off the reservation. Likewise, a college scholarship funded by the tribal government may benefit tribal citizens living far away from tribal headquarters.

Expenditures reported by pilot participants reflected this diversity in public investments. Participating tribal governments reported expenditures related to central administration (five of five); police and legal services (four of five); solid waste, water supply, and sewerage (four of five); and streets and highways (three of five).

Tribal governments also channel resources toward the well-being of their citizens, families, and communities across many domains of life. Despite overlapping federal, state, county, and city jurisdictions and programming in Indian Country, participating tribal governments reported broad investments in human services. All five reported expenditures in health care facilities, programs, and other spending, as well as in housing, community, and economic development. All five also reported investments in cultural programming and preservation—an uncommon expenditure among other types of governments. Nearly all (four of five) reported education and employment spending.

Preview benchmark information is available to tribal governments

Information gathered through the Survey of Native Nations pilot offers tribal governments a glimpse of data that—once they become more comprehensive—could be available to inform their decision-making. Findings from the pilot also provide insights that can help a range of policymakers consider unique aspects of public finance in Indian Country. Because the pilot survey was available to a small number of tribes, results should not be taken as representative of all—or even all Montana—tribes.

Beyond the limited number of participants, the survey design honored responding tribes’ right to choose the information they wanted to provide and decline to answer individual survey items. As a result of this design, a participating tribe might affirm that they had revenues in a particular category but decline to provide a specific dollar amount—thereby limiting related analyses. In some cases, data for a relevant comparison between a tribal and nearby county or city government were also unavailable, since not all local governments complete relevant U.S. Census Bureau surveys.

Even with its intentionally small scale, the pilot Survey of Native Nations laid the groundwork for refining the survey and making it available to more tribal governments across Indian Country.

Survey pilot and expansion prioritize tribal data sovereignty

Tribes are sovereign nations. In distinctive ways, they provide services to citizens and other residents, engage in the broader economic ecosystem, and interact with other governments. Revenues and expenditures reported by Survey of Native Nations pilot participants reflect these dynamics—and the uniqueness of public finance in a tribal government context. The pilot initiative and ensuing interest in its expansion underscored the value of comparative public finance information to tribal governments.

In summer and fall 2024, CICD is actively partnering with two large regional Native organizations—ATNI (the Affiliated Tribes of Northwest Indians) and USET (the United South and Eastern Tribes, Inc.)—to expand the survey, making it available to nearly 100 tribes across 20 states. As with the initial pilot, CICD is administering the expanded Survey of Native Nations in accordance with our Principles for Research and Data Use, which prioritize tribal data sovereignty and the safeguarding of tribal data stewarded by CICD. Based at the Federal Reserve Bank of Minneapolis, CICD is part of the Federal Reserve System, which has a long and well-established track record of secure data collection and handling.

High-quality, policy-relevant data—collected and handled with respect for tribal data sovereignty—are vital to enhancing economic visibility in Indian Country. As the effort matures, the Survey of Native Nations aspires to become a valuable, trusted resource for tribal leaders and other policymakers seeking a clear understanding of the uniqueness and complexities of public finance in a tribal government context.

If you are interested in learning more about the Survey of Native Nations and how your tribe might participate, contact Heather Sobrepena (Cheyenne River Sioux Tribe and Crow Tribe) or Casey Lozar (Confederated Salish and Kootenai Tribes) at CICD.

Endnote

* Unless otherwise noted, the benchmark numbers for city, county, and state governments in participant reports and in this article were calculated by the authors using publicly available U.S. Census Bureau Annual Survey of State and Local Government Finances data and supporting technical documentation.