American Indian tribes being squeezed by inflation and legacy obstacles to bond issuance testified in front of the House Appropriations Committee on Friday, calling for increases in federal spending to meet critical needs on tribal land.

The sympathetic hearing was chaired by Rep. Tom Cole, R-Okla., a member of the Chickasaw nation who acknowledged a funding shortage. “We know that funds for tribes have not kept pace with the growth of overall federal spending,” he said. 

According to Cole’s numbers, appropriations for programs created by the Native American Housing Assistance and Self Determination Act accounted for 2.6% of total appropriations in 1998. As of 2023 the number has dropped to 1.4% with less than 1% going towards transportation. 

Roads are a major area of concern as funding for maintenance is running way behind. “On an annual basis the SRPMIC receives $92,000 from the U.S. Department of Interior, Bureau of Indian Affairs for road maintenance,” said Gary Bohnee, special assistant, Office of Congressional and Legislative Affairs, Salt River Pima-Maricopa Indian Community in his testimony.

“This represents 6.5% percent of the total need. The SRPMIC keeps a prioritized list of projects for right of way acquisition and improvement into a two-lane paved road. At current funding levels, it will take over 50 years for us to complete these projects.”  

Fixing the roads is further complicated by the relationship between reservations and neighboring municipalities. “The county depends on the tribe to finance public safety initiatives on and around the reservation,” said Leo Sisco, chairman, Santa Rosa Indian Community, Santa Rosa Rancheria Tachi-Yokut Tribe in his testimony. “The tribe depends on the county to provide an experienced workforce and the necessary equipment.”  

Housing assistance is sent to the tribes by way of HUD Community Block Grants, which are competitive and over-subscribed. In her written testimony, Barbara Little Owlexecutive director, Standing Rock Housing Authority pointed out the U.S. government has a contractual obligation to amend the situation. “We respectfully urge the Subcommittee to provide double or triple current funding levels in the FY 2024 appropriations for tribal housing. The United States has a treaty and trust responsibility to provide safe and secure housing on the Standing Rock Indian Reservation.” 

Just like states chasing federal funding opportunities for infrastructure projects, the tribes are on the hook to provide matching funds which are often raised by bond issuance. Unlike the states, the Internal Revenue Service restricts the use of tax-exempt tribal paper to funding only essential government functions, which knocks out using exempt private activity bonds. 

The IRS provides a remedy in the form of tax-exempt Tribal Economic Development Bonds, which are capped. As of April 1, 2023 there’s about $62 million available. 

The current complex arrangement leads to analysis by Brookings, indicating that “tribal governments pay significantly higher yields than state and local governments,” and  that “tribal governments pay 22% to 87% higher borrowing costs than nontribal governments.” 

The budget shortfalls in Indian Country are being added to the congressional to-do list.  ”Keeping the promises made to tribes should never be considered discretionary,” said Tonya Plummer director, Native American Housing Programs, Enterprise in her testimony. “The broken treaties do not justify continued disregard for these promises, regardless of the political negotiating of the day. Indians were never intended to be a line item on a budget. We always have been, and always will be, the most elemental part of the fabric of this great nation.” 

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