As 2003 comes to a close, New York state continues to tighten its fiscal squeeze on resident tribes. Through its own fiscal bungling and ineptitude over the last three decades, Albany has created an economic environment that continues to drive manufacturers and other employers out of state. A controversial plan to stem that tide, the Empire Zone program, gives employers years of tax-free status in return for hiring only one new worker. Officials running the program recently admitted that they have no clue as to its effectiveness.
Now, the fiscally challenged state government is not only trying to force tribal businesses to collect its sales taxes, but is also looking to unilaterally extract money from existing casino compacts.
Rewind for a moment to 1993. That year, former Democratic Governor Mario Cuomo negotiated a pair of casino compacts with the Oneida and St. Regis Mohawk nations. The deals allowed the tribes to open their respective Turning Stone and Akwesasne casinos; neither stipulated that New York receive a monetary payment from either. The state Senate and the Assembly played no part in the matter.
These agreements were of course properly negotiated between sovereigns on a government-to-government basis. At the time, nobody realized the momentum that Indian gaming would accumulate, nor did either of the legislative bodies raise a ruckus.
In 1999, the Upstate Citizens for Equality (UCE), an anti-Indian sovereignty group, filed lawsuits challenging the two compacts. Last June, New York's highest tribunal, the Court of Appeals, ruled the Akwesasne compact invalid for not having received legislative approval. (The UCE lawsuit challenging the legality the Oneida-Cuomo compact is working its way through state courts.)
In late November, the St. Regis Mohawk Tribe proposed to install slot machines at Akwesasne and "share" revenues with the state, on a sliding scale that eventually reaches 25 percent, in return for retroactive validation of the 1993 compact. The Oneidas, however, don't see the need to renegotiate a deal supposedly bargained in good faith, yet state officials unilaterally demand re-negotiation.
On Dec. 17, Oneida Nation Representative Ray Halbritter accused Gov. George Pataki's negotiation team of acting in bad faith by making "11th hour" demands for funds from the Oneidas' Turning Stone Casino. During talks to resolve the Oneida land claim and other outstanding issues, state officials suggested that revenue sharing was the only way to guarantee legislative approval of the tribe's current compact.
Last July 9, Aurene Martin, the Interior Department's Acting Assistant Secretary for Indian Affairs, told the Senate Indian Affairs Committee that the concept of revenue sharing is not specifically authorized by the Indian Gaming Regulatory Act (IGRA). Rather, it has evolved over the years from the state-tribal negotiating process. If a tribe is willing to pay for a concession that a state can make - like exclusivity for a particular region or for a certain time period - then Interior reviews the agreement to ensure fairness and that the tribe is able to pay.
The Turning Stone compact grants no exclusivity or any special concessions to the Oneidas; but now, 10 years after the fact, Albany suddenly wants a quid pro quo.
"Our position is that in order for the state to ratify the gaming compact, it must be assured a share of the revenues," Pataki spokeswoman Suzanne Morris told the Associated Press on Dec. 17. Can a state hold a tribe hostage for money, as New York may be doing to the Oneidas?
Here is what IGRA says:
"Except for any assessments that may be agreed to under paragraph (3)(C)(iii) [governing the regulatory costs assessed to tribes] of this subsection, nothing in this section shall be interpreted as conferring upon a State or any of its political subdivisions authority to impose any tax, fee, charge, or other assessment upon an Indian tribe ? to engage in a class III activity."
Likewise, states may not refuse to enter into compact negotiations "based upon the lack of authority in such State, or its political subdivisions, to impose such a tax, fee, charge, or other assessment," according to IGRA.
This language, taken directly from the text of a federal statute, explicitly prohibits the quid pro quo that Albany is unilaterally trying to wrest from the tribes.
That said, it is up to the individual tribes as to whether or not to play along. As mentioned above, the St. Regis Mohawks, with a court-invalidated compact and facing Albany's demands for money, proposed to share slot revenue with the state. While some may see this as capitulation to unreasonable demands, it is up to the Mohawks, as a sovereign entity, to decide their own course. If they choose to renegotiate their compact, so be it.
For their part, the Oneidas have indicated willingness to share slot revenue from a Catskill casino. And, if they ever install coin-operated slot machines at Turning Stone (the current machines are "cashless" making them Class II and not subject to revenue sharing) revenue sharing could be negotiated. But the Turning Stone compact, the nation insists, was negotiated in good faith and need not be changed.
Officials from Madison County, where the Oneida Nation owns land and has a number of business interests have renewed their calls for the nation to "make payments to local governments," according to the Dec. 22 edition of the Syracuse Post-Standard.
"At the very least, we should be looking at re-negotiation of the casino compact," crowed a Madison County supervisor. "That compact had nothing in it for anybody but the Oneida Indian Nation."
This sounds like a comment from a man who can't see the forest because of all the trees.
The Oneida Nation offers, through its Silver Covenant program, payments in lieu of taxes to local school districts and municipalities in which the nation owns property. Those entities that accept such payments do so in recognition of Oneida sovereignty. Those that do not accept the payments reject Indian sovereignty, continue to hold out for actual tax payments, and completely fail to see the economic engine that the nation has become.
Through Turning Stone and its other economic enterprises, the Oneida Nation employs some 3,700 people in the Central New York region on a payroll of $85 million, much of which is spent locally. An ongoing expansion of the resort will add 1,000 new jobs over the next year. The Nation is the largest employer in both Madison and Oneida counties and the region's 13th largest. Of course, these facts do not take into account the business provided to vendors and contractors throughout the area, who might otherwise be idle if not for the nation.
It is time for Albany and some of these local governmental barons to get off their high horses and take a good hard look at reality. The Oneidas and the other New York tribes are an integral part of state society and economy. They offer an economic engine of considerable potential in a state that through its own governmental ineptitude is slowly destroying its traditional manufacturing economy without devising a replacement. The tribes are generally willing to share some of what they have, in return for respect recognition of their sovereignty. Unilateral demands for re-negotiation of a good faith agreement are not respectful.
Can Upstate New York's entire economy be based on Indian gaming? No one is suggesting that. But if the state and local governments work with the tribes instead of trying to browbeat them, chances of a successful economic renaissance for the region increase exponentially.