Inland officials fighting to keep special casino fund

Sacramento – Inland governments and tribes are fighting to preserve millions in payments meant to help public agencies deal with the burdens of the region’s tribal casinos.

Local cities, sheriff’s departments and other agencies have collected more than USD 40 million in gambling mitigation payments from a tribe-funded account since 2005, the most in the state. The money has paid for everything from traffic signals to police officers.

But local governments haven’t received anything in almost two years. The governor vetoed allocations for 2007-08. And payments for the current fiscal year and beyond are a question mark because the formula to distribute the money is scheduled to expire Dec. 31.

Meanwhile, the state’s estimated USD 15.2 billion budget shortfall makes the account’s USD 182 million balance a tempting target to pay for state services now supported by the general fund.

„That money was paid for with good intentions by tribal members. And they are entitled to have that come back to the communities,“ Riverside County Supervisor Roy Wilson said.

Riverside and San Bernardino counties, local cities and tribal leaders have stepped up lobbying efforts in recent weeks to get the money. Last month, a large delegation of Coachella Valley officials spoke at a Senate hearing on a bill dealing with the program.

Mark Macarro, chairman of the Pechanga Band of Luiseño Indians near Temecula, told the Senate panel that the tribe had paid more than USD 100 million into the account and wanted the money to go to local agencies.

Known as the special distribution fund, the pot of money was created by the 1999 agreements that legalized Las Vegas-style gambling on tribal land. Most tribes with casinos paid into the fund, including all of the large tribes in Riverside and San Bernardino counties.

The current fight over the fund began last August, when Gov. Schwarzenegger vetoed the entire USD 30 million allocation for this fiscal year.

Schwarzenegger cited a recent audit that raised questions about whether local agencies really were spending the money to mitigate the effects of tribal gambling.

It was the second year in which Schwarzenegger had vetoed special distribution fund money. After a 2005 veto, lawmakers quickly restored the money and Schwarzenegger went along.

Not this time. The Democrat-controlled Legislature seems to be in no hurry to re-appropriate the 2007-08 money or to allocate money for the 2008-09 fiscal year, which began July 1.

The 2003 bill by state Sen. Jim Battin, R-La Quinta, that created the formula for distributing the money is set to expire at the end of next year. Some lawmakers have said the state should overhaul the formula, which has been criticized over the years as too favorable to the Inland area.

Lawmakers feuding

Schwarzenegger’s budget proposals in January and May didn’t allocate any money from the distribution fund. The governor’s office demanded changes to address a state audit that found that some agencies used grants on expenses unrelated to tribal gambling.

The July 2007 report concluded that the payments didn’t break any laws but violated the intent of the program. It questioned payments for a rescue ambulance boat and a program for troubled students, among other things.

Local officials contended that the spending was casino-related. The money for a Riverside County program to help keep at-risk students out of gangs can benefit the casino by reducing gang membership and crime in the area, officials argued.

Assemblyman Alberto Torrico, D-Fremont, introduced a bill earlier this year in response to the audit. The measure, AB 1389, restricted the spending of distribution fund money to those services or projects tied specifically to casino mitigation.

In recent days, though, the legislation has come to highlight disagreements among lawmakers over how to handle the fund.

The Senate Governmental Organization Committee, which oversees tribal gambling issues, forcibly amended Torrico’s bill. Now the bill includes the USD 30 million vetoed by Schwarzenegger. It also would extend the program by a year.

The move upset Torrico, the Assembly majority leader, who said he will drop the bill as a result of the changes. He said he wanted his bill to deal with just the audit recommendations, with any funding matters dealt with later in the summer.

„The only bill that was alive — and which I had committed to everyone would have USD 30 million in it at the appropriate time — is no longer an option because of the hostile amendments,“ Torrico said.

State Sen. Jim Battin, R-La Quinta, who sits on the Senate panel, said Torrico was being disingenuous.

„There are people who want to steal the money,“ he said.

Budget Process

Officials disagree over the fund’s purpose. But the Legislature’s nonpartisan fiscal analyst, for example, has suggested tapping the casino mitigation money to pay for any state programs tangentially related to tribal gambling.

As a result, Battin and other Inland officials want the distribution fund to be dealt with outside the budget process because of what they said is the chance the money would be diverted from local communities during the give-and-take of negotiations.

„If you’re looking at the difficulty of bringing the budget into balance, that’s not a long-shot guess at all,“ said Michael Corbett, a lobbyist for Riverside County.

Further clouding the fund’s future are renegotiated gambling agreements between the state and the Pechanga band and other Inland tribes that took effect earlier this year.

Under the terms of those deals, those tribes are no longer required to pay into the special distribution fund. Instead, the tribes and local governments are supposed to work out agreements to mitigate casino burdens.