Council approves staggered payments for Minor’s Fund
By SCOTT MCKIE B.P.
ONE FEATHER STAFF
The disbursement of the Minor’s Trust Fund, aka the “Big Check”, has been a source of debate and controversy for some years now. In recent years, as the Fund has grown and the checks have gotten larger, the tax burden on young EBCI tribal members receiving these funds has grown exponentially.
Tribal leaders decided enough was enough and took action on Tuesday, May 31. During the Budget Council session, Ord. No. 38 (2015), submitted jointly by Principal Chief Patrick Lambert and the Junaluska Leadership Council, was passed which allows for staggered payments of the Fund instead of one lump sum payment – thereby saving over $100,000 in taxes.
“By putting it under this type of plan, it will save the youth over $104,000 in taxes because of that lessened amount of a tax bracket,” said Chief Lambert.
The funds will be distributed in three payments at age 18, 21 and 25. The first such distribution is planned for June 2017. The legislation was amended from its original form of four payments (ages 18, 21, 25 and 30).
Big Cove Rep. Teresa McCoy abstained from the vote but did state during the debate, “I believe when a person turned 18, it should be entirely up to them as to what they should do with their money…I believe at 18 that people have choices and they’re expected to make those choices.”
She told of speaking to one of her constituents who related they wouldn’t have been able to purchase a car or home without having access to all of their Trust Fund at once. Rep. McCoy said she would like to see the youth have an option of whether to leave the money into the account or withdraw it.
Chief Lambert referred back to earlier discussions at the beginning of per capita distributions years earlier when an option was discussed for youth to be able to keep their money in a savings account until they reached age 21. “That was talked about a lot, and it was encouraged for the youth to do that; however, the IRS came back and said no, there’s such a thing as constructive receipt and so it’s taxable at that moment. Thinking about it staying in and drawing a little more interest earnings and a little more earning power is interesting in the fact is that there is some tax in that; however, if you pay it out in smaller amounts, like is being proposed here, then the tax is less because it doesn’t kick into that higher tax bracket.”
On the housing issue, Chief Lambert related he has tasked the Tribal Housing Division to develop a program whereby a young tribal member, at age 18, can get a new home (roughly $100,000) and have it paid off by the time they are 25 years old. “We’re looking into that program. It’s being set up right now. It’s really about tax savings and being able to utilize that for the benefit of the young people rather than giving it to the federal government.”
Vice Chief Richard G. Sneed said he strongly supports the staggered distributions. He told of discussions he had with various tribal members who oppose the staggered plan but said the evidence doesn’t bear out that many youth are using their money to purchase homes or start businesses. “What the Chief has proposed is the most responsible approach to dispensing the funds.”
Mary Crowe, an EBCI tribal member from the Yellowhill Community, commended the Junaluska Leadership Council for their work on the issue and told of her three children – one of whom has received their money and two who will in the next few years. “This is something that we didn’t do 18 years ago…we’ve been getting per cap for nearly 20 years and we have to evolve with that…and, in saying that, I’ll just ask this Council to support these young people also.”