Tribal groups balk at Gambling Control Commission increase

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SACRAMENTO, Calif. - In the past month, two tribal groups have expressed
opposition to Gov. Arnold Schwarzenegger's plan to expand the state's
Gambling Control Commission budget.

One of these groups, the California Nations Indian Gaming Association
(CNIGA), announced its opposition in early February and another, the
California Tribal Business Alliance, expressed its reservations over the
budget plan in March.

The Alliance is a coalition of six tribes - the Pala, Paskenta, Pauma,
Rumsey, United Auburn and Viejas - that have shown a willingness to work
with Schwarzenegger. All but the Paskenta signed new compacts with him last
spring.

The governor proposed a $4.8 million increase for the next fiscal year,
which begins in July, to fund around 45 more full-time positions including
staff at the commission and establish a state-run gaming testing lab. This
would roughly double the commission's size. However, sources at the
Alliance and press reports claim that the governor will scale back the
proposal to 25 positions.

Calls to the governor's finance office to confirm this were not returned by
press time.

The state claims the money is needed to take on enhanced oversight
responsibilities in the wake of the new compacts. The Alliance disputes
this, claiming the governor has not provided the justification for such an
increase.

"If they need more positions, we are not opposed; but we just haven't seen
it," said Allison Harvey, who works for the Alliance.

The state's nonpartisan Legislative Analyst's Office (LAO) seemed to agree
and said "further consideration" is needed.

"Even though the proposal is a major expansion of the commission ...
[Schwarzenegger's] administration has provided little justification as to
what problems would be addressed," wrote the LAO on its Web site.

The opposition to the commission's move perhaps marks California tribes'
strongest collaboration since their united effort to legalize gaming in
California five years ago. A rift between the Alliance and the much larger
62-member CNIGA since then has formed, stemming mainly from different
approaches to gaming negotiations with the state, including concessions by
the Alliance that some individual CNIGA tribes said went too far.

However, a March 7 letter to the governor from the Alliance expressing
opposition to the commission's expansion makes it clear that both groups
are on the same side on this issue.

Susan Jensen, CNIGA's director of communications, said the governor's plan
would not be fair. For one thing, she contends, the commission's $4.8
million funding increase would be paid out of one of two funds originally
established for the tribes by the original compacts.

The specific fund from which the commission funding increase would come is
known as the Special Distribution Fund, into which only tribes with more
than 200 gaming devices before Sept. 1, 1999 had to pay. Approximately 20
tribes pay into the Special Distribution Fund. Most of the other tribes
with smaller operations, or who did not have casinos as of that date, pay
into a revenue sharing trust fund distributed to other California tribes
with small or no gaming establishments.

Around $72 million was paid into the Special Distribution fund last year.
Tribes that signed compacts with Schwarzenegger, including the Alliance
tribes, do not pay into the special distribution fund from which the money
is taken.

Jensen claims that money that is diverted from the special distribution
fund would impact funds for the programs originally targeted by that fund,
including mitigation for casino impacts on local communities and problem
gambling programs.

California would also be the first state to have its own testing lab. Two
private companies now conduct gaming testing in the state, and Jensen
claims that a state-run lab would defeat the purpose of independent
testing.

"If the state runs it, I don't really see how it can be independent," said
Jensen.

Since the funding increase will have to clear the California Legislature,
it is unclear whether the governor will successfully implement the
increase. Sources in Assemblyman Jerome Horton's (D-Inglewood) office
confirmed press reports that Horton said the Legislature would likely make
a much more modest increase of seven members. Horton's Governmental
Organization Committee will deal with the issue.