Advertisement
Rebecca Weise, the tribe's attorney general, said the payment, due next month, won't be made because of a state Supreme Court decision last week.
A provision in the tribe's gambling compact approved last year by Democratic Gov. Jim Doyle allows the tribe to skip the payment because the court invalidated the unending nature of a compact, Weise said.
The tribe, which runs casinos near Baraboo, in Black River Falls and Nekoosa and a bingo hall in Madison, is the second to announce it will withhold payments because of the court decision. The Forest County Potawatomi tribe, which runs a casino in downtown Milwaukee and has a similar provision in its compact, said last week it won't make a $34 million payment also due June 30, if the decision stands.
Both tribes continue to offer Las Vegas-style games, such as craps and roulette, which Republican legislative leaders say are illegal under the court ruling.
Not all of the state's tribes have said they will withhold payments, but the state could lose about $143 million in payments by June 30, 2005 — the end of the state's current two-year budget cycle, said Bob Lang, director of the Legislative Fiscal Bureau.
Each of the 10 compacts signed with various tribes handles payments differently in the event of a change in terms, so the effect on the state budget is difficult to predict, Lang said. Under the compacts, the tribes would be obligated to pay a combined $100 million a year for the right to exclusively offer casino gambling — up from about $24 million under previous five-year compacts approved by former Republican Gov. Tommy Thompson.
Legislators likely will have to cut spending or find other revenue to make up the loss in tribal money. But programs specifically funded with part of the gambling revenue may not suffer because they have first dibs on whatever money does come in, Lang said. About $23 million a year is reserved for those programs, which range from ethanol producer subsidies to support for tribal health centers.
"We think these programs are not in jeopardy," Lang said.
The state's general fund could fall $97 million short through June 30, 2005, under Lang's estimates, which were presented Wednesday to the Legislature's Joint Finance Committee.
Tribes say they need lengthy compacts to attract financing for economic development projects, such as casino expansions. But Republican legislative leaders say Doyle failed to cut the best deal for state taxpayers and that tribes continue to illegally offer high-stakes games.
Republican legislative leaders don't want to shut down casinos but want them to operate under constitutional compacts, said Assembly Speaker John Gard, R-Peshtigo.
Prompted by the court decision, the Legislature on Wednesday passed AB 998, which would give it authority to approve or reject compacts negotiated by the governor. Doyle will veto the bill, as he has done to two similar proposals since he took office in January 2003, said Dan Leistikow, a Doyle spokesman.
Compacts negotiated by Doyle position Wisconsin among the top states in terms of revenue from tribal gambling compacts, said Senate Minority Leader Jon Erpenbach, D-Middleton. Wisconsin is just one of seven states that get revenue from tribal gaming activities beyond the amount needed for regulatory oversight, Erpenbach said.
Legislative oversight of negotiations would lead to gridlock, said Kevin Cornelius, who heads legislative affairs for the Oneida Nation, which runs a casino in Green Bay.
Tribes also have little incentive to renegotiate deals, suggesting they already offer high-stakes games and won't have to make payments, said Cornelius, who testified before the Joint Finance Committee.
"Why would we pay more for less?" Cornelius asked committee members.
Contact Tom Sheehan at tsheehan@madison.com or (608) 252-6198.
