Catawbas, Rock Hill School Officials at Stalemate Over $4.5 Million Debt

Feb 23, 2017

The Catawba Indian Nation and the Rock Hill School District are wrangling over a $4.5 million debt the tribe owes the school system that dates back to 1993. Catawba leaders say they don’t have the money, so school officials may seize their off reservation property as compensation.

Credit Gwendolyn Glenn

“They’re entitled to something, but not $4.5 million,” says Catawba Chief Bill Harris. “I mean for $4.5 million, we could have built our own school.”

The debt stems from past fees the tribe was charged for Catawba students who lived on the reservation and attended Rock Hill schools.

“Did it truly cost $4.5 million to educate those children? I understand the schools need money but to tax us unfairly to educate our citizens and therefore citizens of the state is an inequitable tax,” Harris says.

The debt goes back to a 1993 agreement between the tribe and federal and state governments. To settle their attempts to reclaim some of the 144,000 acres they once owned, the Catawbas signed a written agreement that gave them $50 million and 1,000 acres.  

The land was put in federal trust and it is not taxable. So, the agreement stipulated that since the tribe would not have to pay property taxes, Catawba students who attended Rock Hill schools would be charged the same fees that out-of-district students paid.

“We balked at that and then the federal representative said, don’t worry about that. There’s something called impact aid that is available to Indian country that will cover that and the tribe would not be accountable,” Harris says.

Rock Hill School Board Chair Jim Vining says taking land the Catawbas own off the reservation may be the district's best bet of collecting anything from the tribe.
Credit Gwendolyn Glenn

So, they had an unwritten agreement on that aspect, but there was a problem. Only about 150 Catawba students attended Rock Hill schools. For that aid to kick in, 400 students or 3 percent of the district’s student population had to be Catawbas, says Carol Higham. She lectures at UNC Charlotte on Native American policy.

“Ninety percent of Native American children attend public schools and get Impact Aid from the federal government,” Higham said. “But this is the only case I know where the Native Americans are in such a minority and they fall below the Impact Aid. This is an odd case.”

The Catawbas say they don’t have the money. Rock Hill School Board Chairman John Vining sympathizes with the Catawbas, but says, “They have an obligation to pay some money based on the settlement they reached when the agreement was made, the tribe had two options, do their own schools or pay for those services with the school district, that was part of what they agreed to.”

The Catawbas challenged the school fees twice in court and lost both times. They paid the district $400,000 in the first case. The current debt from the second ruling was $2.5 million, but with court-ordered interest tacked on, the debt ballooned to $4.5 million. Since 2006, the district stopped depending on property taxes for its operating budget, so no new fees are incurring. In any event, the court gave the Catawbas 10 years to pay off the debt. That 10 years is up in May.

The school district has already filed liens against 23 acres of undeveloped land that the Catawbas own off the reservation. Now the system is threatening to take that land. Vining says its do that or get nothing.

“Once this happens, I think we would be OK dropping it because we don’t see them being financially able to provide the full amount anytime soon,” Vining said.

Some wonder why the tribe does not pay off the debt with some of the $50 million that was part of the 1993 agreement. Chief Harris says a lot of that money was used for needed construction on the reservation and to pay for social services for the tribe’s 3,000 members. Plus, Higham points out that the Catawbas did not get that money in a lump sum and it came with restrictions.

“It often sounds like these groups have a lot of money but it’s all earmarked for something,” Higham says. “Some of that may be taken by the BIA to pay for lawsuits or other fees they owed. All of these tribal Nations have a long history with the federal and state governments where there are past debts, so they never get $50 million outright. They get $50 million with a but after it.”

Credit Gwendolyn Glenn

The tribe has a two-year-old Bingo operation in Rock Hill, but Harris says it’s hasn’t competed well against the state’s lottery and has lost close to $1 million.

“The tribe has no economic development to cover that debt,” Chief Harris says.

For such a large debt, the two sides seem to be cordial. They serve on boards together and district officials say they have patiently given the tribe nearly 10 years to figure out a way to pay the money. But Harris says if the school district takes their land now, there will be long-term negative consequences for the tribe.

“Anytime you have land, a developer will tell you, you have money in the bank. If there was an opportunity that came up to do something on the land or sell the land for an economic opportunity, they just took the seed money,” Harris says.

Attorneys for both sides are still trying to work out a deal. Neither side is saying if they think a settlement is possible, but as long as they’re talking, there’s hope.