Politics playing role in tribal compacts

May 1, 2007 4:20 AM

The California governor’s budget office has lowered its expected revenue from the expansion of gambling at five Southern California tribal casinos.

Blaming slower-than-desired legislative action and the decisions by two tribes to install fewer than expected slot machines next year, the Department of Finance now expects to get $313.5 million in the 2007-08 budget year, which begins July 1.

In his original budget estimate, Gov. Arnold Schwarzenegger projected receiving $506 million from revisions of the state’s gambling agreements with the five tribes.

Together the revised agreements, known as compacts, would allow the tribes, including the Agua Caliente Band of Cahuilla Indians and the Morongo Band of Mission Indians, to add 22,500 new slot machines.

"That’s how much erosion there’s been" in the original estimate, said DOF spokesman H.D. Palmer.

The letter said that the erosion will increase at the rate of $1.26 million daily for each day that the compacts aren’t approved by the Legislature after May 15.

The revenue loss is likely to mean cuts in the already stressed state budget, though Palmer wouldn’t speculate where those cuts might occur.

Whatever the specific numbers, Morongo spokesman Patrick Dorinson said the compacts offer the state significant new funds to address health and education needs while trying to balance the budget.

"I think it’s still a substantial sum of money," he said, "and as the state is looking at increasing budget pressure, any new dollars should be welcomed."

The state projections were released about the time the California Democratic Party Convention in San Diego began its series of caucuses, one including Native American issues.

It is the Democratic dominated state Assembly that is holding up ratifying the new tribal compacts.

The governor’s $506 million estimate of revenue from the expanded compacts has been criticized as exaggerated since it was released in January as part of his proposed 2007-08 budget.

Legislative Analyst Elizabeth Hill said tribal payments to the state treasury probably would only reach $200 million in 2007-08 and that it would take three to 10 years to reach $506 million.

But Palmer said the original projection was sound, "sound in the sense of an accurate projection of revenue based on the number of devise that we were told of at the time" the estimates were made.

Finally, the budget experts said their estimates had to be revised because the Legislature didn’t ratify the compacts by April 1.

The Senate passed the ratification bills last week, but the Assembly isn’t expected to take them up for several weeks, with final action possibly not before this summer.