Oneida Economic Stimulus

 We can make things easy on our people

“How about an Oneida

Economic Stimulus Program?”

By Vince DelaRosa

Green Bay, WI  - Today, now more than ever, we really have to question strongly how tribal leaders make decisions as it relates to their tribal members. I see leaders sometimes making things needlessly harder on their people.

As we all understand, this world is getting tougher economically to live in, and the time has come for our tribe to do more for our people. The question we have to ask ourselves is, “Do we want to make life easier for our people?” The answer to this, of course, is yes. So here is some discussion regarding how we may be able to do just that, make life easier.

Before we get to the easy life, I want to give you an example of what I am talking about, when it comes to leadership making things needlessly hard. Here is a prime example of leaders making things harder on the people and it happened on this reservation.

I remember several years ago, Councilman Ed Delgado and myself took a position on the Oneida Business Committee (OBC) that we did not have to count per-capita payment dollars against tribal member’s rents. This was an easy decision because the law allowed for those payments not to be counted against the tribal members rents. But most of the OBC, the General Manager, the Oneida Housing Authority and the Oneida Law office all took another position, they said, “These payments must be counted.” Well after much hassle and wrangling, we were proven to be right and the people’s interests were protected. Why does this kind of action against the people’s interest happen?   

The genesis of a good idea

                       

I also remember during discussions about per-capita over the years, I have suggested we utilize a general welfare program so we can get services out to the people and a lot of people in different leadership positions at the time said, “We can’t do that, peoples’ income will be impacted.”

I was suggesting at the time that we can buy groceries, pay for car repairs, pay for home repairs, supplement rental & mortgage payments, and give out small personal payments, as advances in lieu of whole payments. The truth is that we can construct a general welfare program that can do all of this. This may not be a classical per-capita based program, but rather a stimulus type program where we use our money to address the general welfare of our people. Regardless of what we call it, it’s time to do it.

For example, with the recent federal stimulus money that came to many tribes, some tribes used the money to directly help their people. We distributed our money around for good use, but I really wish we could have seen that money go directly towards trying to make life easier for our people. Direct financial assistance would have been my preference. Our focus needs to start shifting inward.

How about stimulus for us

I would like to see our tribe implement an Oneida Tribe Economic Stimulus Program (OTESP). An OTESP can be used to help the many struggling, homeless and unemployed people that we have on or near our reservation. I also think we can help Oneida’s in other areas. Many tribal governments are initiating their own economic stimulus payment programs to assist tribal members in need and we should too.

Shelter is a great area where the OTESP can be applied for assistance. We really do need to step up in this area. For example, the money we utilize for housing today, that money doesn’t even come from our pockets, it comes from the federal government. Likewise, the new federal budget cuts (17%) are probably going to impact the level of federal housing funds that we get. Today, the Oneida housing waiting list is climbing and we need to start taking some action to do something to address this issue.  

I will note, some of the new tribal stimulus programs are presenting unintended consequences. Whether to utilize tribal stimulus payment for an OTESP is more than just a political decision, it will also take a little work to guard against unintended tax consequences. So some level of financial planning does need to be worked out and understood.

We can make this plan work

How can a good idea have a bad result? Take for example a tribal elder who relies primarily on state or federal social assistance payments to meet their everyday needs. Generally, eligibility for state and federal benefits depends on a person’s income. A tribal OTESP payment might be factored into the income determination, and might also require tax withholding and tax reporting. As a result on some reservations, a tribal elder who is close to the income limit can be pushed over the economic limit and can have their other social assistance payments denied or reduced because of a tribal payment such as an OTESP payment. The good news is that this need not be the case, we can address this.

Tribes can and should take advantage of the Internal Revenue Service (IRS) doctrine known as the “general welfare exception.” This law allows Indian tribal governments to make “payments to individuals under legislatively provided social benefit programs for the promotion of the general welfare.” This one step can allow us to help our people without impacting their gross income.

How we can do this is through a properly drafted OTESP. These types of payments must be paid through a “general welfare plan.” As such, if we created an OTESP this program could help our people without harming some of the income requirement issues which they need to be mindful of.

The requirements for such a general welfare plan are as follows: (1) the payment is made from a government general welfare fund, which can be a new OTESP; (2) the payment is made on the basis of need; and (3) the payment is not made as payment regarding services.

Payments from federally recognized Indian tribes meet the “government” requirement. Is there any catch? Well the general welfare exception applies only to governmental payments out of a general welfare fund based upon the recipients’ identified need, which need not necessarily be financial.

Let’s talk about the issue of need. One of the ways documented by the IRS to determine “need” is if the recipient has an income below the “national family median income level.” This limitation may actually not be much of a limitation, given the historically disproportionately high unemployment figures on Indian reservations. How the unemployment rates are on our reservation, I am not sure, but we can address these issues during a drafting stage.

A general welfare plan will set out eligibility criteria which addresses who is eligible. Under an Oneida OTESP we can spell out what types of needs are to be met by the plan (e.g., food, shelter, medical expenses), and all other criteria can be hammered out and addressed during the drafting and public hearing stages. I believe we can do amazing things around this plan, such as the amount and frequency of payments can be unique. I could see us having a program where the tribal member determines when they want to access the fund for assistance. We’ll also have to have some device for verifying the need-based eligibility criteria, but we have staff that can easily handle that.

If structured right, we should have no problem having funds from the OTESP be deemed as a promotion for the general welfare of the people. Further, I believe any payments from a properly structured OTESP can be excluded from the recipient’s gross income.

I will also say, I do not favor limiting who can receive assistance payments. However, if the GTC wants to draw a line, that can be done. Such as anyone making over, say $80k or more a year in income, may be deemed ineligible. However, if we were to decide to have the program be wide open, here are some general thoughts.

Program is open to everyone

First I would say, there is no reason why if we determine that the program is applied broadly to everyone, that we can't allocate a set amount for fund eligibility, almost like a per-capita payment. So we could say through policy, here is the amount you are allowed to access if you need assistance and here is the form you need to fill out, real simple.

Similarly, we can set up policies to cover this matter if we want to open the program up and apply it broadly, that’s no problem. Remember, we are talking about taking a need based type of program and opening it up. This is a hypothetical that I raise to explore and explain that we can be flexible here and service all the tribal members if the GTC so desires to open this up. So if we decide to open this stimulus program up, some may not obviously conform within the need basis and there may be some tax implications. Here are a few options we can consider to address that situation.

First, we can provide for an opt-out or waiver provisions that would allow certain tribal members who do not want the payments counted as income to voluntarily refuse the payment.

Second, we can create a two-tiered stimulus plan that provides non-taxable payments to tribal members meeting certain need-based criteria and a similar taxable payment to other tribal members who do not qualify or do not wish to apply for the need-based payment. This way, all tribal members can benefit from the payment without suffering adverse tax consequences.

Third, here is another unique way to structure the program, we can structure the program to qualify as “supplemental security income” in order to ensure that the payments are recognized by the Federal Social Security Administration and other agencies to avoid any offset or reduction of other benefits to which the tribal member may be entitled.

Finally, regardless of how we structure the plan, we can make available tax advisors to meet with tribal members to discuss their individual financial situation so we can merge elements of this program uniquely and individually into the financial structures of each member’s lives.

If our nation can assist with tribal members’ basic fundamental necessities of life, we will be a better nation for it. I believe that making stimulus payments a part of a properly structured general welfare plan can lessen the burden of living expenses on our people and can lead to all of us living easier lives.