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Jon Coupal- Columnist

Jon Coupal is an attorney and president of the Howard Jarvis Taxpayers Association -- California's largest taxpayer organization with offices in Los Angeles and Sacramento. [go to website] [go to Coupal index]

Taxes Should Be Fair and Predictable
Prop. 70 and tribal gaming
[Jon Coupal] 10/20/04

The issue of tribal gaming in California is complex and has far-reaching consequences that are important to all Californians.

That is why the Howard Jarvis Taxpayers Association has carefully reviewed the provisions of Proposition 70, which would place into the State Constitution the requirement that tribal casinos contribute to the state a percentage of their revenue, an amount that is equal to the tax paid by California corporations, about 9 percent.

The situation today is that different tribes are being charged vastly different rates -- and in some cases nothing -- with no apparent rhyme or reason. This problem began with the administration of Governor Gray Davis, who negotiated 20-year compacts with 53 gaming tribes that did not require any payment to the State. In response, the administration of Governor Arnold Schwarzenegger has negotiated compacts with five gaming tribes and five tribes seeking to open casinos. The result is ten compacts each with different terms.

This raises the possibility that negotiations with other tribes will drag on for many years, and that someday we will have more than fifty individualized deals. Many tribes with casinos have no incentive to make a deal with the Governor because they have 17 years left on their current compact with the State. They may choose to simply wait out the current Governor. On the other hand, Proposition 70 asks for a fair payment and in return provides the tribes with the protection of certainty. One uniform deal that goes into effect now is better and fairer for everyone.

Another important observation: Although Indian land is sovereign, tribal members are an integral part of our California community. It is unfortunate that some critics have tried to demonize our Indian neighbors with false and misleading charges that they don't have gaming audits or pay property taxes. The fact is that Indian tribes pay millions to California's local governments around the state even though they must still provide for services on their sovereign reservations -- such as roads, electricity and medical centers. Their casinos are routinely audited under the 1999 compact provisions -- provisions which are very strict and more intrusive than audits that exist for California citizens.

The Howard Jarvis Taxpayers Association has supported much of Governor Schwarzenegger's agenda as he has worked diligently on cleaning up the mess he inherited. But on the issue of Indian gaming, we believe that Proposition 70 reflects fairness for California taxpayers as well as the tribes themselves.

Proposition 70 compacts mean all Indian gaming tribes will pay equally for their gaming operations and pay at the same rate as other Californians. This means nearly $2 billion for California over the next five years. These revenues will help protect taxpayers from the specter of tax increase proposals to balance the budget. In addition, Proposition 70 is our "last, best chance" to reach a deal with tribes who do not have to negotiate unless they want to.

Proposition 70 is a fair deal for all Californians. CRO

copyright 2004 Howard Jarvis Taxpayers association


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