Rodney Butler, chairman of the Mashantucket Pequot Tribe, renewed his plea Wednesday for an end to “dual taxation” of personal property on the state’s two federally recognized Indian reservations, urging lawmakers to find a way to offset the revenue such a move could cost the towns of Ledyard and Montville.

Butler appeared to be preaching to the choir ― the state legislature’s Finance, Revenue and Bonding Committee, which last year voted for a bill that would have accomplished his goal before stalling later in the legislative process.

This year, House Bill 5467 would “address the wrong of allowing an adjacent municipality to exert its taxing authority on sovereign tribal trust land,” Butler said in public-hearing testimony.

He said Ledyard’s taxation of personal property owned by stores at the Tanger Outlets at the Mashantuckets’ Foxwoods Resort Casino and by certain casino restaurants owned by third parties would be like East Hartford taxing food vendors at the XL Center or Rhode Island taxing the property of Connecticut business owners ― “situations that would never be tolerated.”

Local taxation of personal property owned by entities that lease space from the tribe compromises the tribe’s ability to raise revenue to support the governmental services it provides, Butler told committee members. He also cited the example of the water-system upgrades the Mashantuckets are undertaking in connection with Great Wolf Resorts’ development of an indoor water park on tribal land adjacent to Foxwoods.

“But unlike other governments, we cannot raise revenue to support those critical governmental services by imposing property taxes without our taxpayers (vendors) being subject to dual taxation due to a neighboring government’s imposition of property taxes within our jurisdiction,” Butler said.

The problem, he acknowledged, is that exempting vendors’ property located on tribal lands from municipal taxation would cost Ledyard and Montville, which hosts Mohegan Sun, between $600,000 and $700,000 a year each.

James Gessner, the Mohegan chairman, submitted written testimony in which he said his tribe supports HB 5467 provided it “protects the financial interest of our neighboring towns and their residents” and recognizes “the critical issue of parity among Native American tribes in Connecticut.”

He noted that decades ago, the state urged the Mohegans and Montville to enter into an agreement that allows the town to impose certain taxes on the tribe and commits the tribe to an annual payment to the town of $500,000. If a tax exemption were to apply to property on the Mashantucket reservation but not to property on the Mohegan reservation, it could put Mohegan Sun at a competitive disadvantage, Mohegan officials have said.

Montville Mayor Ronald McDaniel and Thomas McNally, chairman of the Montville Town Council, opposed the proposed legislation, which they said would upend the town’s agreement with the Mohegans and its ability to shoulder costs associated with hosting Mohegan Sun, such as maintaining the town’s transportation infrastructure, public safety, utilities and schools.

In written testimony, Ledyard Mayor Fred Allyn III took a similar position, saying that while the Mashantuckets have their own police, fire, ambulance and public works departments, Foxwoods’ patrons, vendors and employees also utilize Ledyard’s infrastructure and services.

“Additionally, the children that reside on the (Mashantucket reservation) in non-taxable homes also attend Ledyard schools,” Allyn said in his testimony.

He acknowledged that the tribe’s share of the casino slot-machine revenue it contributes to the Mashantucket Pequot-Mohegan Fund, which is distributed to towns throughout the state, is a boon to Ledyard’s finances. The tribes’ contributions to the state’s coffers have grown in the last year following the legalization and taxation of online casino gambling and sports betting revenues.

Allyn wrote that he found it “odd” the state would seek to “fix” something that impacts only two of its 169 municipalities and “equally disconcerting” that three members of the legislature’s southeastern Connecticut delegation would sponsor and co-sponsor HB 5467 without communicating with him or McDaniel.

Democratic Reps. Anthony Nolan of New London and Christine Conley of Groton introduced the measure, and Rep. Aundré Bumgardner, D-Groton, signed on to it.

Allyn also noted federal courts have upheld the right of local governments to tax non-tribal personal property on federally recognized reservations. In April 2021, the Connecticut Supreme Court ruled Ledyard was entitled to attorneys’ fees and interest it incurred in successfully pursuing a case involving its taxation of slot machines leased by Foxwoods.

The finance committee chairmen, Sen. John Fonfara, D-Hartford, and Rep. Maria Horn, D-Salisbury, both indicated they’re supportive of HR 5467, at least in principle, as did at least two committee members from southeastern Connecticut, Rep. Holly Cheeseman, R-East Lyme, and Bumgardner.

“I think taxation on tribal nations is unacceptable,” said Rep. Stephen Meskers, D-Greenwich, who suggested dual taxation could be dealt with through adjustments in the tribes’ compacts, or gaming agreements, with the state.

Cheeseman asked how other states have dealt with the matter.

In response, Jody Cummings, the Mashantuckets’ general counsel, said states including Mississippi, North Carolina and Nevada have enacted legislation forbidding local taxation on tribal lands while Washington state has addressed the issue through compacts with tribes.

While dual taxation is a top priority of the federal government and tribes nationally, it is better dealt with on the state level, Butler said.

b.hallenbeck@theday.com