Native American Press/Ojibwe News

State budget deficit will be felt especially hard in Indian country

December 6, 2002
The recently announced state budget deficit of $4.65 billion couldn’t come at a worse time for Minnesota’s three largest Indian reservations, Leech Lake, Red Lake, and White Earth. All three are facing enormous debt problems due to previous administrations’ investing too heavily in destination resort type expansions to their casinos.

Collectively, these three reservations are nearly $175 million in debt, which will need to be paid out of tribal gaming proceeds during the next ten or twelve years. That’s money that won’t be going to tribal needs.

One can argue that the expansion of the resorts will increase employment opportunities on the three reservations, but the truth of the matter is that a lot of jobs just aren’t filled by tribal members for a number reasons: they don’t care to work in a casino, they don’t have the training, tribal politics, and the past reluctance of tribal governments to hire educated Indians. The net effect is that the $175 million debt load will have a devastating impact on tribal programs.

With the state’s newly-discovered and pressing need for cash, and the shifts in political power in Minnesota from rural to suburban, and away from supporters of the Indian establishment like Roger Moe, Doug Johnson, and Dave Bishop, there is going to be a new impetus for the state to go into gambling as a ready source of revenue, whether a state-owned casino, slot machines at Caterbury Downs, or some other combination of gambling and state government.

It’s unfortunate that several years ago, tribal leaders didn’t come to the state and negotiate new compacts which guaranteed a continuing Indian monopoly but cut the state in on Indian gambling revenues. If Indian tribes had been proactive in dealing with the issue, then they would have been able to take the initiative and negotiate for favorable terms. Now, they will be at the mercy of whatever the state wants to do, other than whatever influence their half a million dollars of campaign contributions during the last election bought them. Since a lot of that money went to the losing side, the amount of influence they actually bought is open to question.

The regrettable aspect of this situation is that the reservations are already feeling the impact of the change in priorities in Washington: from reservation programs to homeland security and war expenditures. Now, this will also be true with state programs, in addition to seeing reduced amounts of money available from gaming profits. People will be facing a “triple hit” in Minnesota Indian country.

Red Lake is already in the middle of dealing with the impacts. They are in the middle of their budgeting cycle for calendar year 2003, which begins three weeks from now on January 1, 2003, and they are certainly dealing with the impact from the casino problems, as well as much lower-than-expected income from state tax rebates.

Leech Lake and White Earth are operating on a fiscal year basis, so they won’t have to be dealing with budget problems this soon, but they are facing reduced state and federal funding levels, as well as reduced profits from the casinos.

All other reservations will, sooner or later, also feel the impacts, but not as drastically as the three big northern reservations, because of their large populations, undeveloped economies, depleted natural resources, heavy debt loads and isolated rural casinos.

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