Counties, Tribes seek casino deal in Wisconsin budget fix

When Gov. James Doyle proposes his plan in mid-month for fixing a projected $3.2 billion state deficit in the two-year period starting July 1, a relatively small line item in that budget will have big implications for Wisconsin counties in which tribal casinos operate.

In 2001, 11 Wisconsin tribes sent $24 million in gaming fees to Madison as provided in gaming compacts each has with the state.

Doyle says that’s not enough, adding he’s willing to renew those gaming compacts beyond their current five-year term, and expand the games that tribal casinos can offer, in exchange for a bigger share of their profits.

For those counties, the big question is whether that new money stays in Madison, or will be shared with them, as the tribes are proposing.

Doyle hasn’t provided the number he’ll include in his budget. His team reportedly has proposed to increase the state’s annual fees to about $100 million in negotiations with the United Tribes of Wisconsin, representing the 11 tribal nations.

Mark Marotta, Department of Administration secretary in the Doyle cabinet, is heading the state team. Marotta and representatives of the governor didn’t return telephone calls for this story.

Negotiating for the United Tribes are its 11 chairmen and a tribal attorney.

For the tribes there’s an urgency rivaling closing the state’s budget hole. Their five-year staggered compacts begin to expire this year

Gambling is big business for the tribes, providing financing for community and economic development that’s bringing unprecedented prosperity to most reservations and surrounding counties.

Jeff Crone, a Lac Courte Oreilles tribal council member, detailed study findings on that impact in 2001 during a Dec. 5 presentation to board chairmen in 10 northwest counties. Among the conclusions in the study commissioned by the United Tribes:

• Gaming provides 35,000 jobs in the state, with as much as 75 percent of that workforce comprising non-tribal members.

• The average annual casino wage is $31,000.

• In addition to that $24 million payment in fees in 2001, casinos paid $63 million in sales and other state taxes.

The first of the compacts expires on Feb. 16 with the Lac Courte Oreilles, which operates the LCO Casino Lodge and Convention Center near Hayward.

“I think it’s highly unlikely that (the governor) is going to issue a notice of non-renewal,” said Lee Hardin, its casino manager on Jan. 28. “I think it’s possible to get this done in the next three weeks.”

The length of renewals is a major concern to the tribes. Wisconsin’s five-year term is the shortest among several surrounding states. It presents a barrier to the economic development potential of gaming on reservations and in surrounding rural communities. That development potential was a cornerstone in the rationale for the federal Regulatory Indian Gaming Act that legalized Indian casino gambling and established the state gaming compact machinery.

In Minnesota, for instance, gaming pacts provide for operation in perpetuity with periodic state reviews. When a Minnesota tribe seeks financing for economic development projects, a bank can consider its compact a virtual guarantee of ongoing wherewithal to repay the loan. By contrast, the Wisconsin law allows the governor to treat a compact renewal as a re-application, and that makes bankers leery of longer-term financing.

“There will be $600 million in tribe-related construction in Wisconsin with 30-year compacts,” Crone said.

Spokesmen for the governor have said he understands that longer compacts will spur capital investment that will spill over into surrounding communities with jobs and new wealth.

’“Governor Doyle told us he didn’t like the idea of setting limits on industries,” Hardin said.

Each of the compacts is unique, reflecting special issues with each tribe. But there’s a consensus among all 11 tribes on four issues in the negotiations: They want the freedom to set their hours of operation; a uniform legal age to gamble (18); a wider gaming scope to include roulette and other new games; and extensions of the compacts in perpetuity, similar to state oversight in Minnesota.

“Doyle has said he’s willing to discuss periodic reviews (as part of indefinite extensions),” Hardin said.

The widest gulf in the negotiations appears to be over who will get to keep future gaming payments from the tribes. Another interested party in the outcome — those counties with casinos — are not represented at the table. That could change at a legislative agenda-setting forum in Madison on Feb. 3-4 of the Wisconsin Counties Association (WCA). Counties with casino-related expenses intend to push for association support of a formula for returning some of that revenue, some of it earmarked for joint economic development with the tribes.

“We have an agreement (with the tribes) to talk on our behalf,” said Myron Schuster, executive director at the Northwest Regional Planning Commission. “In exchange, the counties are supporting longer compacts,” Schuster said, adding “none of the money is earmarked for the counties right now.”

The northwest planning district includes LCO and three other tribes, and 10 counties. Four of them — Ashland, Bayfield, Burnett and Sawyer — are hosts to Indian casinos.

Hardin said the tribes want that money brought back to the counties, as was the intent when the compacts were initially drawn. “The state was supposed to hold back only dollars for the cost of regulation, with the rest of it being returned for infrastructure projects in the areas it originated from. The state hasn’t honored its agreement,” he said.

The tribal and affected counties each have internal issues to resolve before the two groups can present their strongest united front. Four tribes with casinos in or near metropolitan areas — the Ho-Chunk, Oneida, Potawatomi and St. Croix — generate the lion’s share of revenues going to the state. Their interests and issues outweigh those of the six smaller nations.

Counties hosting those 24 casinos also have different expectations, said Schuster, who wanted to take a resolution of support for extended compacts and revenue sharing with counties from the northwest commission to the WCA meeting. It wasn’t possible because some larger population centers are asking for a major share of any money set aside for counties, he said. “We had a snag with a couple of counties,” he said, declining to identify them.

David Dumke, a WCA representative in the northwest region, and former Douglas County Board chairman, said counties with casinos face an uphill fight for a share of the money. “I think there will be a deal (between the state and tribes). We’re working with the tribes to be a partner,” he said.