Skip to main content

California strategies: ballots and negotiations

  • Author:
  • Updated:

In all negotiation, arriving at the fairness of middle ground is optimal. States need not bite for the tribal throat and tribes might always consider cultural precedents and the reasonable approach to neighborliness that evidences good civil sense.

It would appear the issue of "fair share" in California is progressing beyond the polarizing demands of the recall campaign to the nitty-gritty of pragmatic negotiation.

"Negotiations are proceeding in a constructive, sleeves-rolled-up atmosphere," according to one tribal attorney. Eight gaming tribes, including the staid Morongo and Viejas governments - always invested in political action - are negotiating with the governor.

Some quid pro quo's over numbers of slot machines, market conditions and revenue payments are on the table and 15 percent of revenues as a middle ground is under discussion. The eight tribes are requesting from Gov. Arnold Schwarzenegger long-term deals and substantial expansion of casino gambling operations. In return, they could agree to dramatically increasing payments to the state. Compacts of 50 years or longer are being considered by the state, which is also considering raising the cap on the number of slot machines allowed in the tribal casinos and to permit the addition of high-stakes games like roulette and craps.

Somewhere in these terms is the entrance to the middle ground in California. The tribes are increasingly effective business partners in many communities now. They know the value of stability. Some tribes might be willing to pay even more than 15 percent of their annual gaming revenue to the state for the long-term prospect of business stability, one that would allow the tribes to expand and diversify with access to better long-term financing terms.

Schwarzenegger's negotiators are pushing for an April or May deal that would secure $500 million from the tribes to help offset next year's $14 billion deficit California budget.

Many tribes in California enjoy long-term compacts already and could refuse to even negotiate with the governor. He in turn could stimulate the proposed ballot initiative for next November that would force a 25 percent payment or allow slot machine gaming in card clubs and race tracks, threatening tribal exclusivity in the marketplace. The discord engendered this way, however, could be a costly and complex mess for all.

As our own Indian Country Today California Reporter James May has written, "Schwarzenegger, possibly as an olive branch to the tribes, has said that he would oppose the proposed measure that has not as yet even gathered enough signatures to qualify for the ballot."

A possible solution (suggested here last year) proposes that the state offer as incentive lifting the caps of 2,000 slot machines, in exchange for new tribal incomes to donate a larger percentage to the state. We have always questioned the wisdom of capping or limiting the growth of a successful industry that has created thousands of tax-paying jobs for California. Add a long-term stable revenue base for the tribes with 50-plus year compacts and it would appear a middle ground, win-win agreement could be achieved.

The California tribes do well to try to hammer out agreements that can solidify the tremendous economic positioning and capital base building they have achieved. Governor Schwarzenegger would do well to reciprocate by recognizing the wonderful potential of tribes not so much as a source of direct revenue but as economic rotors in key areas of his state. One improvement: the Governor has taken his earlier demand that tribes pay a "fair share" of 25 percent of their revenues to the state off the table. We'd also like to see his administration refrain from using the term "fair share" in the public discourse. It stands in direct contradiction to the horrific sacrifices California's Indian peoples have suffered and endured throughout the state's history.

Particular kudos this week to Agua Caliente Chairman Richard Milanovich for the unique approach his nation has taken on the issue. Agua Caliente commissioned an informative poll to arrive at a voter definition of "fair share." The poll found the term "fair share" for the tribes to mean paying the same current taxation rate of other California corporations, which is 8.84 percent. Chairman Milanovich is proposing a ballot initiative that would fix the tribal revenue sharing at the same rate as other corporations provided the arbitrary industry cap on slot machines and other games is lifted. Milanovich's proposal is meant to counter the initiative proposed by gaming interests in the state, which would force 25 percent payment on the tribes or greatly expand competing state and non-Native gaming. This anti-tribal initiative proposal has been approved by the state and is now collecting signatures to be on the ballot for the November vote.

Creative Indian strategies are much in order.