Lawmakers propose 9 percent revenue sharing rate

Thursday, Dec. 23, 1999 | 9:51 a.m.

But before most tribes could take advantage of the new, lower rate - down from the present 16 percent - they would have to pay the state everything they owe under current gambling agreements, the panel also said Wednesday.

Those were among the preliminary suggestions of the Committee on Compacts, which is reviewing proposed new pacts negotiated between Gov. Gary Johnson and Indian tribes.

The panel will finalize its recommendations next week, when it suggests a list of changes for the governor and the tribes to consider.

One of the major issues still facing the committee is the duration of the compacts. Johnson and the tribes proposed 22 years; lawmakers say that's too long, but they did not agree Wednesday on a shorter period.

Legislators also must decide how much tribes should pay in regulatory fees.

The committee rejected a provision that tied tribal revenue sharing to gambling expansion at race tracks. Under that proposal, what the tribes owed the state would be reduced if new tracks were opened, or if tracks were allowed more slot machines or longer hours.

The racing industry opposed the provision, and the regulatory Racing Commission said it would make it harder to decide to license new tracks.

Lawmakers objected that it tied their hands on making gambling policy.

"I don't see why these contracts should give away part of the Legislature's power," said Rep. Max Coll, D-Santa Fe.

The proposed new compacts contain a tiered revenue sharing plan under which tribes would pay a maximum of 7 percent on both slot machines and table games, estimated to yield about $23 million a year. But under the plan, one-quarter of that money would go to the local government of the tribe's choice - which could include another tribe.

Committee members said that could wreak havoc - for example, as tribes infused money into local school systems and upset equalized school funding.

They opted for a straight 9.2 percent revenue sharing rate with all the money - an estimated $28.6 million - going to the state. The figure was plucked from a bill that the Legislature worked on during the last session but didn't pass.

"That's still quite a reduction from the (current) 16 percent," said Rep. Jerry Sandel, D-Farmington, the committee's vice-chairman, who proposed the figure.

Under the negotiated proposal, tribes that hadn't paid their full 16 percent and still owed the state would have had to make some back payments, but at a reduced rate - with the state potentially forgiving more than $50 million in disputed payments. Overall, an estimated $75 million is owed.

Committee members said their colleagues and their constituents would not stand for that.

"I don't think if this committee recommends anything other than full (back) payments, it would have any chance at all to pass the House of Representatives," said Rep. Andy Kissner, R-Las Cruces.

Any proposed compact that came out of the current process would have to be voted on by the Legislature.

Rep. Joseph Thompson, R-Albuquerque, said his constituents think the tribes ought to be required to pay in full. But he cautioned that a new compact requires the approval of the U.S. Secretary of Interior, who has expressed doubts about the legality of the 16 percent rate and may not approve repayment at that rate.

Sen. William Davis, R-Albuquerque, said the state could prevent more headaches and lawsuits if it decided not to try to collect any revenue sharing from tribes.

"I'd rather just get rid of revenue sharing. ... The lousy 17 million bucks ain't worth it," he said, referring to the state's share under the negotiated agreement.

The panel recommended some changes that could sweeten the compact for tribes: removing prohibitions on offering free or discounted food or lodging to casino players - except for free alcoholic drinks, which would still be barred - and removing the requirement that casinos close for four hours a day.

The committee also recommended removing the prohibition on tribal use of gambling revenue to make political contributions.

New Mexico Indian Gaming Association Chairman Frank Chaves said tribes and the governor would carefully review the proposed changes. But he said until the entire proposal is finalized, he could not say how acceptable it would be.

"We have to look at it as a whole package," he said.

The state's 11 tribes with casinos have maintained since they signed the compacts in 1997 that the revenue sharing and regulatory fee payments were illegally high. Only three tribes have paid in full.

Attorney General Patricia Madrid has said if the Legislature doesn't resolve the payments dispute by enacting new compacts, she will go to federal court next spring to force the tribes to pay up.