Governor draws line on casino fund

2:15 am PDT
By Jennifer M. Fitzenberger -- Bee Capitol Bureau
Story appeared on Page A3 of The Bee

A GOP lawmaker wants to free up $20 million in an earmarked account to help local governments cope with traffic, public safety and other problems exacerbated by Indian gambling.

State lawmakers want to free up $20 million for local governments to deal with the effects of Indian casinos such as clogged roads and increased calls for police and firefighters. Lawmakers this year asked for $50 million from the Indian Gaming Special Distribution Fund to mitigate effects of tribal gambling.

Gov. Arnold Schwarzenegger approved $30 million in the state budget, but he put $20 million on hold, saying he didn't have enough information about how the money would be spent.

Roughly 25 counties receive money from the fund created with proceeds from tribal gambling. The money pays for public safety, road maintenance and other local projects.

Howard Dickstein, an attorney for the Rumsey Indian Rancheria in Yolo County and the Auburn Indian Community in Placer County, said the two counties receive a tiny percentage the Indian Gaming Special Distribution Fund but that the lion's share of the fund is intended to address the adverse effects of major Indian casinos in Riverside and San Bernardino counties. He said the local tribes negotiated their own agreements to pay the local counties for added traffic from the Cache Creek Casino Resort in Yolo and the Thunder Valley Casino in Placer.

"That was done intentionally to eliminate the situation where the local governments and tribes are beholden to the state to authorize mitigation funds," Dickstein said.

In his veto message, Schwarzenegger said local governments did not provide reports detailing how funds were spent in previous years. But Sen. Jim Battin, R-Palm Desert, said reports had been filed and that a communications glitch led to the governor receiving wrong information.

Battin said the reports have since been delivered to the Republican governor, and he now hopes that Schwarzenegger will sign his legislation to restore the extra $20 million. Last fiscal year, local governments received $30 million from the fund.

"I'm pretty confident we'll get it out of the Legislature quickly," Battin said of Senate Bill 288, which is in the process of being amended. "We've got to make sure we get the governor's support."

H.D. Palmer, a spokesman for the state Department of Finance, said that in future years the Schwarzenegger administration wants to receive county spending reports in October, before the governor's budget proposal is released in January. That way, Schwarzenegger will know how the money is being spent before deciding how much to make available.

Current law requires spending reports to be sent to the Legislature in April.

"If we do indeed move forward with a stand-alone bill, we'd like to have that fix," Palmer said.

Tribes give money to two state funds: the Revenue Sharing Trust Fund, which gives slot-machine license fees to non-gambling tribes, and the Special Distribution Fund, which sets aside a portion of gambling revenues for several purposes, including county reimbursement.

Each year, tribes in California pay about $100 million to the latter fund.

Special Distribution Fund money is used for problem-gambling prevention programs, to help cover state regulatory costs and to support local governments affected by Indian casinos. It also supplements the Revenue Sharing Trust Fund when license fees fall short of what non-gambling tribes are supposed to receive.

Minus $30 million for local mitigation, the Special Distribution Find has a balance of about $80 million. So, lawmakers sought to give an additional $20 million to local governments.

"It's just sitting in the bank and not being spent," Battin said.