Study finds negative impact of KBIC proposed gas station

As gasoline prices continue to rise, with several Marquette County gas stations selling regular unleaded fuel at $3.59 Tuesday, the topic of a Keweenaw Bay Indian Community (KBIC) proposal to build a gas station in Marquette Township continues to be a topic of discussion. 

In a press release issued today by the Upper Peninsula Petroleum Association, the tribal gas station could result in a major financial impact.  A loss of up to 63 jobs, $1.25 million in annual wages, almost $11 million in annual in-store sales, and more than $1.7 million annually in state taxes, according to a study released today by Western Michigan University Professor of Economics Dr. Donald Alexander and Keip Government Solutions.  In addition, petroleum sales for current retailers in the Marquette area could decline by more than $25 million annually. 

Several attempts by ABC 10 to contact KBIC officials Tuesday afternoon were unsuccessful.   The KBIC, earlier this month, stated its intention to submit a proposal to the Bureau of Indian Affairs to convert land in Marquette County (formerly the Los Tres Amigos site) into land that is held in trust for the benefit of the tribe.  The Keweenaw Bay Indian Community said those plans in Marquette Township are moving forward.

The Governor ‘s deputy legal counsel Dave Murley says  the proposed gas station may offer “an unfair commercial advantage over surrounding competitors.”  At issue is that the Bureau of Indian Affairs has to decide whether or not the Marquette Township property where the gas station is proposed can be put into trust for the tribe. If so, the project could continue. Murley says federal authorities should not take the land into trust.  If that does happen, the KBIC would not be subject to the pre-paid gasoline sales tax and would be selling gas at a much cheaper price than other commercial stations.
According to the study, the KBIC proposal would put Marquette County’s 35 petroleum retailers at a significant competitive disadvantage.  It says Marquette County petroleum retailers provide 317 total jobs in the county and are responsible for $6.2 million in wages and more than $180 million in petroleum and in-store sales annually.  Allowing the KBIC to operate a gas station on trust land could cause business losses of 20%, the study reported.

The study also indicated that the proposed KBIC gas station would also adversely affect tax revenue that supports the state government, local governments, and Michigan public schools.  Over the past 12 months, Marquette County petroleum retailers paid $8.4 million in sales tax, $6.2 million of which was allocated to the state School Aid Fund.

The study was commissioned in September 2012 by the Upper Peninsula Petroleum Association which represents 35 petroleum retailers in the Upper Peninsula who operate 90 retail stores and employ approximately 800 people.