Law & Principles

Jonathan Small | May 23, 2022

McGirt mess continues to grow

Jonathan Small

All Oklahomans drive on the same roads and can access the same public-school system. But thanks to the U.S. Supreme Court’s McGirt ruling, some Oklahomans may no longer pay to fund those systems, creating increased financial burdens for everyone else.

In its McGirt ruling, the U.S. Supreme Court held the Muscogee (Creek) Nation’s reservation was never formally disestablished. The ruling has since been applied to the reservations of the Choctaw, Chickasaw, Cherokee, Seminole, and Quapaw tribes. The affected area is home to roughly 2 million people of which 21 percent are estimated to be American Indian.

So far, the main impact has been on the unfortunate victims of crime in eastern Oklahoma in cases involving a mix of Indians and non-Indians. Due to McGirt, only the federal government can prosecute most of those cases—and the federal government is declining to prosecute most of the time, stripping victims of justice.

But other Oklahomans could soon feel the impact in their pocketbooks.

At the recent Muscogee (Creek) Nation National Council Quarterly Session, officials approved a resolution authorizing a federal lawsuit. The litigation will seek a declaration that all tribal members who live and work within the boundaries of the Muscogee (Creek) Nation Reservation (an area that includes much of Tulsa) are exempt from paying any Oklahoma state taxes.

Other tribes with McGirt reservations are expected to follow suit, and there is reason to think they could succeed. Prior cases involving tribal citizens living and working on reservation land have held that those individuals are not subject to state taxation. But no other reservation in the country is like those in Oklahoma, where non-Indians outnumber tribal citizens on reservations. And this shift completely upends the longstanding funding of state government in all of Oklahoma.

The Oklahoma Tax Commission previously estimated that if tribal citizens are exempt from Oklahoma state taxes, the McGirt decision could slash Oklahoma state tax collections by $72.7 million per year from reduced income tax collections and $132.2 million annually from reduced sales/use tax collections.

How will that reduction be handled? By either increasing taxes on other Oklahomans or reducing spending on things like state schools and roads in eastern Oklahoma.

Further highlighting the nonsensical nature of McGirt’s impact, many individuals who could be exempt from state taxation are overwhelmingly non-Indian. Someone who is 1/1020th will be just as exempt as someone with a much more significant heritage.

This reinforces, again, the real harm created by McGirt and the need for Congress to disestablish the McGirt reservations so all Oklahomans are once again treated the same under the law.

A state highway doesn’t care if a driver is Indian or non-Indian. It should be no different when it comes to how those drivers help pay for state roads.

Jonathan Small President

Jonathan Small


Jonathan Small, C.P.A., serves as President and joined the staff in December of 2010. Previously, Jonathan served as a budget analyst for the Oklahoma Office of State Finance, as a fiscal policy analyst and research analyst for the Oklahoma House of Representatives, and as director of government affairs for the Oklahoma Insurance Department. Small’s work includes co-authoring “Economics 101” with Dr. Arthur Laffer and Dr. Wayne Winegarden, and his policy expertise has been referenced by The Oklahoman, the Tulsa World, National Review, the L.A. Times, The Hill, the Wall Street Journal and the Huffington Post. His weekly column “Free Market Friday” is published by the Journal Record and syndicated in 27 markets. A recipient of the American Legislative Exchange Council’s prestigious Private Sector Member of the Year award, Small is nationally recognized for his work to promote free markets, limited government and innovative public policy reforms. Jonathan holds a B.A. in Accounting from the University of Central Oklahoma and is a Certified Public Accountant.

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