AMENDMENTS TO INDIAN GAMING COMPACTS.
Referenda.

A "Yes" vote approves and "No" vote rejects, a law that ratifies an amendment to existing gaming compact between the State of California and:

• Proposition 94: Pechanga Band of Luiseño Mission Indians
• Proposition 95: Morongo Band of Mission Indians
• Proposition 96: Sycuan Band of the Kumeyaay Nation
• Proposition 97: Agua Caliente Band of Cahuilla Indians.

THE QUESTION

Should California voters ratify an amendment to existing gaming compacts between the state and specified Indian tribes which permits the tribes to collectively operate an additional 17,000 slot machines, and omits certain projects from the scope of the California Environmental Quality Act (CEQA), replacing it with a Tribal Environmental Impact Report and intergovernmental review?

BACKGROUND

(From the Pros & Cons and the LAO Analysis)

The California Constitution allows the Governor to negotiate agreements (known as “compacts”) with Indian tribes that authorize the tribes to operate casinos with certain slot machines and card games. In 1999, the Governor and 58 tribes, including those referenced in Propositions 94-97, reached agreements on casino compacts, and the Legislature passed a law approving them. As required by federal law, the U.S. government issued the final approval of the compacts.

All of the 1999 compacts contain similar provisions providing the tribes with exclusive rights to operate certain gambling activities in California. Several tribes have negotiated amendments to their 1999 compacts in recent years; however, for most of the tribes, the 1999 compacts remain in effect today.

Each of the tribes under consideration presently operates about 2,000 Nevada-style slot machines, the maximum allowed under their 1999 compacts. In addition, several of the tribes currently operate a few hundred to upwards of 1,500 other machines, such as bingo-style machines, which are not governed by the compacts.

Annual Payments to the State

Under federal law, tribes do not pay most state and local taxes. Under the 1999 compacts, however, the tribes agreed to make annual payments to two state government funds: the Revenue Sharing Trust Fund (RSTF), and the Special Distribution Fund (SDF).

The state distributes some of the RSTF revenues to each of the 71 federally recognized Indian tribes in California that have no casino or operate only a small casino (less than 350 slot machines). Revenues from the SDF are used for purposes related to casino compacts, such as covering shortfalls in the RSTF, funding programs that assist people with gambling problems, making reimbursements to state agencies that regulate tribal casinos, and making grants to local governments affected by tribal casinos.

Approximate current annual payments made to these state funds by the tribes under consideration are as follows: Prop. 94, Pechanga Band, $29 million; Prop. 95, Morongo Band, $29 million; Prop. 96, Sycuan Band, $5 million; and Prop. 97, Agua Caliente Band, $13 million.

Regulated Activities

The state regulates certain tribal casino activities and payments. For instance, under the compacts, state officials may visit casino facilities, inspect casino records and verify required payments. Additionally, tribes have agreed under the 1999 compacts to allow labor unions reasonable access to casino employees for the purpose of organizing.

Tribes are not subject to full CEQA requirements when a casino is built. However, under the 1999 compacts, when tribes build, expand, or renovate a casino, they must prepare a report on the significant negative environmental impacts of the project and offer the public a chance to comment. They must also make a “good faith effort” to reduce or avoid those impacts outside their reservations.

THE PROPOSALS

In August 2006, the Pechanga, Morongo, Sycuan, and Agua Caliente tribes reached agreements with the Governor to amend their 1999 compacts. These compact amendments would allow the tribes to significantly expand their gambling operations. It would also require the tribes to pay more money to the state. In June 2007, the Governor and the tribes also signed memorandums of agreement (MOAs) that address various casino operational issues which would take effect at the same time as the compact amendments.

Upon approval of these 2006 and 2007 amendments and agreements by the Legislature, the Governor signed the related Senate bills in July 2007. The bills would have taken effect on January 1, 2008, but as a result of these four referenda qualifying for the February 2008 ballot as Propositions 94-97, the new compact agreements have been put “on hold” until the propositions are approved or rejected by California voters.

Proposition 94 would:

• ratify the amendment to the existing gaming compact between the state and the Pechanga Band of Luiseño Mission Indians, allowing the tribe to operate 5,500 additional slot machines in their Riverside County casino;
• omit certain projects from the scope of California Environmental Quality Act, providing for a Tribal Environmental Impact Report and intergovernmental procedure to address environmental impact; and
• require that revenue paid by the tribe be deposited into the General Fund, with the tribe making a $42.5 million annual payment and paying a percentage of revenue generated from the additional slot machines to the state.

Proposition 95 would:

• ratify the amendment to the existing gaming compact between the state and the Morongo Band of Mission Indians, allowing the tribe to operate 5,500 additional slot machines in their Riverside County casino;
• omit certain projects from the scope of California Environmental Quality Act, providing for a Tribal Environmental Impact Report and intergovernmental procedure to address environmental impact; and
• require that revenue paid by the tribe be deposited into the General Fund, with the tribe making a $36.7 million annual payment and paying a percentage of revenue generated from the additional slot machines to the state.

Proposition 96 would:

• ratify the amendment to the existing gaming compact between the state and the Sycuan Band of the Kumeyaay Nation, allowing the tribe to operate 3,000 additional slot machines in their San Diego County casino;
• omit certain projects from the scope of California Environmental Quality Act, providing for a Tribal Environmental Impact Report and intergovernmental procedure to address environmental impact; and
• specify where revenue paid by the tribe be deposited, with the tribe making a $20 million annual payment and paying a percentage of revenue generated from the additional slot machines to the state.

Proposition 97 would:

• ratify the amendment to the existing gaming compact between the state and the Agua Caliente Band of Cahuilla Indians, allowing the tribe to operate 3,000 additional slot machines in their Riverside County casino;
• omit certain projects from the scope of California Environmental Quality Act, providing for a Tribal Environmental Impact Report and intergovernmental procedure to address environmental impact; and
• require that revenue paid by the tribe be deposited into the General Fund, with the tribe making a $23.4 million annual payment and paying a percentage of revenue generated from the additional slot machines to the state.

FISCAL EFFECT

According to the California Legislative Analyst’s Office, the passage and ratification of the gaming Propositions 94-97 would each result in a net increase in annual state government revenues probably in the tens of millions of dollars, growing over time through 2030.

For local governments in Riverside and San Diego Counties where the tribes and casinos are located, there would be a potential net increase of revenues due to economic growth, and potential increased payments from the tribes to offset higher local service costs.

WHAT A YES OR NO VOTE MEANS

A YES vote means that the specified Indian tribes could potentially operate as many 17,000 additional slot machines between them in their Riverside and San Diego County casinos, and the tribes would make increased payments to the state annually through 2030.

A NO vote means that the tribes would be able to continue operating their existing casinos, but would not be able to significantly expand operations, and current tribal payments to the state would not be affected.

SUPPORTERS SAY

• The new agreements will create thousands of new jobs for Indians and non-Indians.
• Though all the affected casinos are in Southern California, the whole state will benefit from the revenues, and so will non-gaming tribes.
• Money raised by the amended compacts will ease our state’s budget crisis and provide billions of dollars for public safety, education, and other services.

OPPONENTS SAY

• Three million Californians signed petitions to let voters overturn the amended gaming compacts.
• Only four of California’s 108 tribes would benefit, and these four tribes could easily manipulate the revenue sharing agreements.
• They promise more educational revenues, but there is no guarantee that revenues will benefit education.

SUPPORT AND OPPOSITION

Official ballot arguments in favor of Propositions 94-97 are signed by Governor Arnold Schwarzenegger; Jack O’Connell, California Superintendent of Public Instruction; and Chief Gene Gantt, Legislative Director, California Fire Chiefs Association.

Additional ballot supporters of Propositions 94-97 include Linda Adams, Secretary, California Environmental Protection Agency; and Alan Wayne Barcelona, President, California Statewide Law Enforcement Association.

Official ballot arguments against Propositions 94-97 are signed by Marty Hittleman, President, California Federation of Teachers; John A.Gomez, Jr., President, American Indian Rights and Resource Organization; and Lenny Goldberg, President, California Tax Reform Association.

Additional ballot opponents of Propositions 94-97 include Dolores Huerta, Co-founder, United Farm Workers; Maury Hannigan, Former Commissioner and Chief Executive Officer, California Highway Patrol; and John F. Hanley, Fire Captain, Fire Fighter Local 798.

FOR MORE INFORMATION

PRO: (800) 827-1276, Coalition to Protect California’s Budget and Economy, http://www.YESforCalifornia.com

CON: (310) 996-2676, Californians Against Unfair Deals, http://www.NoUnfairDeals.com

Web Resources

Smart Voter (one-stop shopping!) includes the resources below and more: Proposition 94 - Proposition 95 - Proposition 96 - Proposition 97

Analysis by the Legislative Analyst’s office: http://lao.ca.gov/ballot_source/Propositions.aspx
Supplemental Voter Information Guide (for Propositions 94-97): http://sos.ca.gov/elections/vig_02052008_public_display_sup.htm
Reports of campaign expenditures for ballot measures: http://cal-access.ss.ca.gov/Campaign/Measures/