Calif. tribe pitches deal with state

Chris T. Nguyen

Friday, Jan. 23, 2004 | 9:08 a.m.

LOS ANGELES -- The Agua Caliente Band of Cahuilla Indians has extended a thorny olive branch to Gov. Arnold Schwarzenegger, proposing a new ballot initiative that calls for tribes to pay as much as corporations to the state general fund.

In exchange, tribes would be allowed to operate as many casinos as they choose on their reservations and to offer roulette and craps, which they cannot do under current state law.

"It takes off the artificial limits that have been placed on us," Richard Milanovich, chairman of the Agua Caliente tribe, said Thursday. "It's our intent to create a fair share environment that tribes can adhere to. This will end the question of what the fair share is."

The tribe is one of the richest in the state, with two casinos in Riverside County.

The proposed initiative, now under review by the state attorney general for the November ballot, is a response to Schwarzenegger's long-standing complaint that tribes don't pay their fair share to the state, Milanovich said.

He said if the measure is approved by voters, its terms would apply only to tribes that want to renegotiate their long-term agreements with the state to operate casinos. The amount of money for the general fund would be based on how many tribes participate.

The state currently collects $130 million from tribes that have casinos, but the money does not go into the general fund. Instead, it's deposited into two special funds earmarked to pay local governments for costs associated with casino operations. Some of the money is also given to tribes without casinos.

Under the proposed initiative, tribes would pay 8.84 percent of their gambling profit to the state -- the same amount paid by corporations. In addition, tribes would continue to contribute to the two special funds.

Schwarzenegger has asked tribes to pay up to 25 percent of their earnings and at least $500 million in the upcoming fiscal year.

The governor has not yet reviewed the initiative but is currently negotiating with some tribes concerning payments to the state and other gaming issues, said Vince Sollitto, a spokesman for the governor.

Michael Cohen of the Legislative Analyst's Office said it will be difficult to determine how much money the initiative could generate for the general fund because the estimated $5 billion in annual revenue tribal casino industry isn't required to report earnings information to the state.

Other tribes contacted Thursday said they didn't know about the initiative. Milanovich acknowledged the measure had yet to receive support from any other tribes.

He said about $50 million will be needed to promote the initiative, a proposed constitutional amendment that would require at least 600,000 signatures of registered voters to qualify for the November ballot.

The Agua Caliente tribe's initiative, called the "Indian Gaming Fair-Share Revenue Act," is competing with another proposed ballot measure. Known as the "Gaming Revenue Act," it would allow card rooms and racetracks to operate slot machines.

Under the tribe's plan, only the measure that collects the most signatures would become law.

The "Gaming Revenue Act" calls for tribes to pay 25 percent of their casino earnings to the state. The money, however, wouldn't go to the general fund. Instead it would be directed to local governments for policing, firefighting and education.

If tribes refuse to pay that amount, five horse tracks and 11 card rooms across the state would be allowed to operate slot machines in return for paying a total of $1 billion to local governments.