Pawlenty Gambles on Stadiums

Jun-Pierre Shiozawa

Last Wednesday afternoon, the Minnesota Legislature simultaneously opened two Pandora's boxes--exploring how to use public money to construct two stadiums and reviewing the gaming compacts that regulate Native American gambling operations in the state--and the timing didn't feel like a coincidence.

At the Capitol, the Senate's State and Local Government Operations Committee heard a report from the stadium steering committee, which is expected to propose legislation to Governor Tim Pawlenty later this month calling for the construction of a baseball park for the Twins and a football stadium for the Vikings. Senator Dick Day (R-Owatonna) seized on the moment to brandish a newspaper poll showing that 71 percent of state residents favor funding stadiums through gambling revenues. "In six months, you can shell all the money out and no one gets hurt. By 2011 we can have three of them built," Day claimed, throwing a new football stadium for the Gophers onto the pile. He further stated that he has 30 Republican Senate votes in favor of his proposal. A similar gambling-for-revenue bill made it through the Republican-led House last session.

Even as Day was speaking, across the street in the State Office Building, the House was convening its Governmental Operations and Veterans Affairs Policy Committee. For the second day in a row, committee members were carefully picking through the details and history of Native American gambling operations, as structured by the gaming compacts negotiated by the state and Minnesota tribes in 1989.

It is revealing that both of these committee meetings were instigated by Governor Pawlenty, who has in the past consistently opposed both public funding for stadiums and the expansion of gambling in the state. This summer, Pawlenty reversed his steadfast position on stadiums by appointing a pro-ballpark steering committee chaired by his staunch political ally and current chief of staff Dan McElroy (McElroy delivered the report to the Senate on Wednesday). And while the governor continues to claim that he is against the expansion of gambling in Minnesota, that stance is belied by the bombshell he dropped during his State of the State speech earlier this month. "I opposed the expansion of gambling in the past," he said. "However, we need to recognize that times have changed. The compacts negotiated with the American Indian tribes almost 15 years ago do not reflect current circumstances--and we need to address the issue. My preference is to keep gaming within its current contours, but we need to explore a better deal for Minnesotans, and that's what we're going to do."

The political calculus that links Pawlenty's recent gambits on stadiums and gambling is rooted in economic reality. McElroy intimated to the Senate that his committee will propose construction of new facilities for both football and baseball, an endeavor that will carry a billion-dollar price tag. The latest rumors are that the state's current $185 million deficit could swell to $500 million when the February forecast is issued later this month. Pawlenty has flatly ruled out a tax hike. And despite McElroy's ambitious claims that as much as $100 million might be generated by forcing 50,000 Vikings fans to fork over $2,000 apiece for a one-time seating license fee, there's no way any of the four football and baseball stadium plans being considered can be achieved without some form of state assistance. That leaves gambling, and Pawlenty's not-so-subtle message to Minnesota's sovereign tribes: Give us some of your gaming profits or we'll set up our own casinos and compete against you.

The two days of testimony in the House last week revealed an embarrassing ignorance on the part of legislators who believe tribes acted in bad faith or somehow hornswoggled the state when the compacts were originally negotiated. On Tuesday, John Williams from the House research staff revealed a far different history. The idea of compacts, giving states a place at the table, was enacted by the federal government only after the Supreme Court ruled that Native American tribes could pretty much operate any kind of gaming operation they chose on any parcel of land they owned. As a result, the state entered negotiations hoping to limit the scope of gambling and to create jobs, especially in rural areas. The current compacts do in fact limit the tribes to blackjack and video poker, and have resulted in the creation of 14,000 jobs, most of them with health insurance and good-to-decent wages, and most of them located in rural parts of the state. What the tribes got in return was no sunset provision--the compacts can't be renegotiated without the mutual willingness of both sides--and the ability to keep nearly all of the revenues. Five other states currently have compacts with similar parameters. Legislators were certainly satisfied with the terms at the time--the compacts unanimously passed in the Senate and encountered just one dissenting vote in the House.

But because current legislators refuse to raise taxes to fund programs while some of the tribes are flush with profits, there is fulmination at the Capitol over the injustice of it all. On Wednesday, Rep. Eric Lipman (R-Lake Elmo) noted that the compacts were designed to "foster mutual respect among Indians." Because "the tribe in Shakopee closed its enrollment rolls" and "aren't treating people fairly," Lipman continued, shouldn't the state "be involved in a separate assessment" of what they're doing? It was left to John McCarthy, executive director of the Minnesota Indian Gaming Association, to patiently explain to Lipman that the state could no more meddle in the Shakopee tribe's affairs than it could in Wisconsin's. Undaunted, Lipman later asked Henry Buffalo Jr., who has done legal work for some of the tribes, if he felt the state could fund a gambling operation near Shakopee as a "remedy" for the tribe's behavior. Buffalo replied that, as with tribes on tribal land, the state doesn't need a "remedy" or any other rationale to do whatever it wants with its own land and people.

Pawlenty, Lipman, and their like-minded colleagues would do well to stop bandying petulant, empty threats, which are hypocritical and smack of racism. Why isn't Pawlenty threatening the private owners of Canterbury Downs--which, unlike the tribes, received state help to expand their gambling operations--to renegotiate for additional payments to the government? Why has Pawlenty been bragging about his JOBZ program, which proposes giving tax breaks to wealthy corporations like Polaris and Andersen Windows to do what the tribes already do and create jobs in rural Minnesota?

The bottom line is that the tribes aren't going to renegotiate the existing compacts because it's not in their interest to do so. McCarthy did leave open the possibility of additional compacts being negotiated, "if it could generate revenue that would help provide health care or some other benefit to both tribal and non-tribal people." Or the state could begin its own gambling operations, setting a tempting precedent for any local or regional municipality to follow suit in order to generate government money in this tight-fisted political climate. If and when that Pandora's box is opened to help line the pockets of billionaire owners like Red McCombs and Carl Pohlad, just remember that in nearly 15 years of operation, none of the state's 18 Indian casinos have suffered a major scandal. Meanwhile, have you read the recent auditor's report on cronyism and mismanagement at the Minnesota Lottery?

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