Repayment would be part of new compacts, governor says

Friday, Nov. 12, 1999 | 10:28 a.m.

The compacts will also include lower payment provisions with graduated rates, Johnson said. That would give a break to smaller operations that bring in less revenue.

Under existing compacts, signed in 1997, tribes with casinos are required to pay the state 16 percent of their slot machine proceeds. All 11 tribes contend that's illegally high, and only three are paying in full.

Johnson said Thursday that the new proposal, which his office negotiated behind closed doors with about a dozen tribes, may be announced within a week.

New compacts would require the approval of the Legislature, which meets for a 30-day session in January.

If they were approved and enacted, it could end the squabbling between New Mexico and the tribes that is the subject of an arbitration proceeding and a threatened federal lawsuit.

The governor said the negotiators would "offer a proposal to the Legislature that solves back payments."

It is unlikely the Legislature would approve a compact that did not include some sort of repayment requirement.

Many lawmakers are angry at tribes that signed the 1997 agreements, then either refused to pay or made only partial payments. And they have been frustrated by the uncertainty of casino revenue. Quarterly payments have shrunk from a high of $8.3 million in January 1998 to $6.2 million for the past quarter.

Legislative analysts have estimated that slot machines in Indian casinos took in about $320 million last year. Sixteen percent of that would have been about $50 million; instead, the state took in less than $30 million in revenue sharing.

Two tribes have made no payments under the 1997 pacts, three tribes have paid in full, and six have paid less than what they owe.

Johnson, interviewed after speaking at a Veterans Day event, provided no details of the new pacts, and it was not clear whether full repayment would be required.

He said only that there would be a tiered rate - similar to the setup in 1995 compacts that were later invalidated by state and federal courts because the Legislature wasn't consulted. In 1995, for example, tribes were required to pay 3 percent of the first $4 million they took in and 5 percent over that.

Johnson would not disclose the proposed new rates, but he said what would be collected overall would be close to 6 percent.

He did not indicate whether the rate of revenue sharing would be based only on the proceeds from electronic slot machines - the current arrangement - or whether tribes would pay on table games as well, which the 1995 compacts required.

Regulatory fees also will be adjusted in the new compacts. Currently, they are fixed - so much per casino, per machine and per table - rather than being based on actual regulatory costs. The federal Indian Gaming Regulatory Act allows tribes to pay the state whatever is necessary to defray the cost of regulation.

Richard Hughes, a lawyer for two of the tribes involved in the negotiations, said the new compacts will include regulatory fee requirements "which we believe are consistent with the provisions of IGRA."

Hughes and the governor also said they expect most, if not all, of the tribes to support the new compacts.