SANTO DOMINGO PUEBLO, N.M. — It's midafternoon on a Friday, and the line of cars, trucks and sport utility vehicles stretches from the shiny new gas pumps out to the road.
"We've been like this since about 10:30 this morning," said station manager Sebastian Lovato, watching drivers jockey for position at the 14 pumps.
Customers find it worth the wait: Gasoline is $1.45 a gallon for regular and $1.59 for premium at the Indian-owned station--a saving of at least 30 cents a gallon over Santa Fe prices.
Mabel Rivera and her husband put enough gas in the tank before they left home in Pecos, about 60 miles away, to reach the station just off Interstate 25.
"Any time we're going to Albuquerque, we stop," the retired state worker said. "It's always less here."
Gas stations on tribal lands are making motorists happy but giving state officials headaches.
In New Mexico, the sale of gasoline on Indian lands is exempt from the 17-cents-a-gallon state gasoline tax, although tribes impose a tax of their own.
State Highway and Transportation Secretary Pete Rahn says his agency is feeling the pinch of the lost revenue, and he worries that it will only get worse.
"If prices continue to go up, there's going to be even more interest in saving a few pennies," Rahn said.
Fuel taxes feed the $300 million-plus road fund used to maintain New Mexico's 11,500 miles of highways. For a variety of reasons--including worsening economic conditions--growth in the fund is nearly flat.
Although the revenue lost to Indian sales is just a fraction of the total fund, Rahn says that as his agency's costs climb, every state dollar becomes more critical.
In the year that ended June 30, 2000, tribes sold some 73 million gallons of state tax-exempt gasoline, according to the Taxation and Revenue Department.
It's estimated that this year's sales could reach 100 million gallons, of a total 950 million sold. That projection includes 60 million gallons sold to off-reservation stations by two tribes that are wholesalers, and 40 million sold at stations on at least a dozen tribes' lands.
The state keeps 13 cents of the tax, with the rest going to local governments; 100 million gallons would take a $13-million bite out of the road fund, up from about $9.5 million last year.
Rahn understands the lure of cheaper prices, but he insists that it's shortsighted. Drivers will end up paying for damage to their vehicles from deteriorated roads, he insists.
"If you're going to drive state roads, you should pay a state gas tax," the highway chief said.
Mike Courtney, filling up his Chevy Impala at Santo Domingo with $1.59-a-gallon premium, wasn't persuaded.
"It's $1.95 in Santa Fe right now," said Courtney, a full-time college student who also builds and sells homes. "I'm trying to save my money."
Colorado vacationer Morris Cottingham cited another reason for pulling his Toyota van into Santo Domingo: "I'd rather give my money to a reservation than anyone else. I believe in helping the Native Americans," the retired mechanical engineer from Boulder said.
Santo Domingo Pueblo has had a small gas station since 1984. But it recently relocated to a bigger, newer building next door, installing pumps that take credit cards, an expanded convenience store, and a counter where pizza and nachos are served.
"We're trying to give [customers] what they want," said Lovato, who's been known to offer regular patrons free cups of coffee.
Gas prices are advertised on a billboard on I-25, and business is up about 40%, Lovato said--despite competition from a recently opened station at San Felipe Pueblo, just a few miles south.
In 1996, Republican Gov. Gary Johnson--worried that a loophole in state law would result in a proliferation of Indian companies wholesaling tax-free gasoline--tried unsuccessfully to persuade the Democrat-run Legislature to restrict tax-free sales.
Agreement was finally reached in 1999. The two existing tribal wholesalers would continue, with their annual sales capped at 30 million gallons apiece. And tribes would impose their own taxes at stations on their lands--keeping the revenue rather than forwarding it to the state.
That was touted as a way to keep gasoline prices roughly the same on- and off-reservation.
But the New Mexico Petroleum Marketers Assn. complains that pricing remains lopsided in some areas, and that the law allows Indian retail sales to grow unchecked.
The consumer won't complain "until he runs his car off into a pothole because it can't be fixed," said Ruben Baca, who heads the industry group.
The sale of tax-free gasoline has been a fractious issue in other states as well. In New York--where a melee between state police and Indian protesters erupted near Syracuse four years ago--it's still unresolved after more than a decade.