The April 2010 decision in Rincon vs. Schwarzenegger appears to have ushered in a new era in state-tribal relations. And it might mean the end of pay-outs to local governments for the impacts of tribal casinos.
The Rincon Band charged that it was illegal for the State of California to require contributions to the state's General Fund in a gambling compact, that it was a form of taxation. The tribe's argument won the day once and for all when the Supreme Court refused to review the case in December 2010.
The district court's order compelled the state and affected tribes to reach a compact or submit their best offers to a mediator. With all appeals exhausted, the Governor now faces the daunting prospect of renegotiating existing compacts in accordance with the court's decision.
As of the April 2010 decision, fifteen tribes operated under compacts that included contributions to the General Fund.
But Gambling Compliance, an international web site that covers gambling news and information exclusively, reports that 70 California gambling compacts will be affected the Rincon decision, saying, "A Southern California American Indian band and the governor's office are making "good progress" negotiating a court-mandated gambling agreement that will likely dramatically impact California's nearly 70 tribal-state compacts, sources said."
No wonder the Governor's office is in such a tizzy!
Brown's latest compacts include percentages of profits paid to local governments to offset impacts. Looks like this might be all out the window now. The state will only be able to ask for contributions to the Indian Gaming Special Distribution Fund (SDF).
The SDF doesn't pay real money for real mitigation issues. Chapter 858, Statutes of 2003 (SB 621, Battin) specifies the funding priorities for the SDF in the following order:
1. Covering annual funding shortfalls in the Indian Gaming Revenue Sharing Trust Fund (RSTF), which distributes grants of $1.1 million per year to tribes that have no casino or only a small casino (with fewer than 350 slot machines).
2. Programs that address problem gambling.
3. Regulatory programs of the California Gambling Control Commission and the Department of Justice concerning tribal casinos.
4. Grants to local governments to address the effects of tribal casinos on local infrastructure and public services.
Not only are the grants to local governments last on the list, local governments do not always use any funds they get for casino impacts and they often have trouble getting the money in the first place.
Tribes, once eager to do anything to get a favorable compact, are now rethinking their approach to compact negotiations with the state. They even had a meeting last month to discuss tactics for future negotiations with the state.
But with the state having no ability to ask for quid pro quo, what's the rush for Brown?
Now that they have the protection of the Rincon decision, which effectively protects them from having to pay anything extra above and beyond the Special Distribution Fund, tribes won't feel compelled to make concessions like they used to.
We can't ask for anything, they don't have to pay for anything, and it can't be a factor in the gambling compact, either.
Note: Native American businesses operating on tribal land pay no local or state taxes of any kind, despite the fact that the tribes rely on tax-funded infrastructure to serve them, including roads and law enforcement.
