During an October 6, 2005 televised Initiatives Forum before the League of Woman Voters the American Lung Association representative said a State of Washington review indicated statewide smoking ban I-901 was “revenue neutral.” Presumably proponents of I-901 were referring to the very narrow issue of the state’s current tax receipts from hospitality businesses. A Fiscal Note for failed statewide smoking ban HB 2038  during the past legislative session in Washington does, indeed, show on its Page 1 “Multiple Agency Fiscal Note Summary” $0.00 added or taken away from state or local government by that ban.

But even on that very narrow basis such claims are shaky at best. One need look no further than Page 2 of the state Gambling Commission’s “Individual State Agency Fiscal Note” for HB 2038  to read the following statement:

“A comparison of gross receipts from statewide gambling activities for the first and second quarter 2003 to the same reporting periods in 2004 shows a decrease in reported gross gambling receipts of $5,755,031.00 from bingo, punchboards, pull tabs and card rooms – a drop of 1.35 %. A comparison utilizing data from Pierce County for the same reporting periods shows a decrease in reported gross gambling receipts of 5,167,169.00 – a drop of 12.58 percent. The decline in Pierce County receipts represents approximately 90% of the overall decline in receipts for the state during the period. (Pierce County makes up about 12% of all gambling gross receipts.)”

The reason why the state Gambling Commission chose the period that it did and compared Pierce County data to overall gambling revenues is because during part of that time Pierce County had its ill-fated and subsequently-overturned smoking ban in effect. Apparently a 12.58 percent decline in gambling revenues during about three months that the county smoking ban was being enforced is “Revenue Neutral.” Annualize those figures for an entire year and you find projected gambling revenue declines on the order of 50 percent. It seems to me that such data are considerably worse than “Revenue Neutral.”

Include the views of Elaine Willman, Chair of Citizens Equal Rights Alliance (CERA), in the discussion and one arrives at decidedly different views about the alleged revenue neutrality of I-901. (CERA) is a national organization of community education groups and citizens in 25 states who reside within or near federally recognized Indian reservations. Ms. Willman is a former Community Development Director for the City of Toppenish, former City of Ojai assistant administrator, she teaches in the Masters in Public and Business Administration programs for a university, and she is pursuing a doctoral in federal Indian policy. Beyond which, Ms. Willman has spent several years studying the subject of tribal influence in state policy and the often-draconian affects such influence imposes.

I invite readers to take a few moments and peruse two of Ms. Willman’s recent papers, “Gut Check on the Spokane Gaming Contract”  and “The Great Casino Camouflage”.

ALL tribal venues are exempt from the mandatory requirements of I-901. Such reality not only exposes I-901 proponents’ claims that the measure will “protect all workers” for the alleged dangers of secondhand smoke but it also sets up Washington residents for new tax increases to makeup for revenues lost to tax-exempt tribal venues. I-901 will cause a migration of patrons who smoke (reportedly about 40 to 60 percent of bar and gaming trade) to tax-exempt and smoking-ban-exempt tribal venues. Along with the migration of that trade and its business revenues comes migration of local tax bases from tax-paying nontrinbal hospitality venues to tax-exempt and smoking-ban exempt tribal establishments.

As Ms. Willman reports in “Gut Check on the Spokane Gaming Contract” recent negotiations have lead to tribes enjoying “Most Favored Nation” status in Washington. Two bills passed during the 2005 legislative session in Washington granted Governor Christine O. Gregoire power to negotiate with tribes tobacco tax provisions. In HB 1915  tribes agree to charge cigarette taxes, however no provision in that bill required tribes to pay any of the taxes received to the State of Washington. Combine that tax revenue incentive for tribes with their tax-exempt status and we arrive at a recipe for economic disaster: tribes can undercut nontribal cigarette retailers due to their economic competitive advantage, collect cigarette taxes, and then keep the tax funds that would have gone to the states for themselves. And I-901 follows behind, adding to that mix with granting an monopoly to tribes to accommodate patrons who choose to smoke as an integral part of their hospitality experience.

An deep economic problem for Washington taxpayers presents itself through those Most Favored Nation, tobacco tax, and patron monopoly subjects. As observed firsthand, on-the-ground by Ms. Willman in New York, tribes then invest their new-found profits in broader businesses such as gas stations and convenience stores, freezing out more tax-paying nontribal businesses. The cycle continues in a predictably downward spiral, clearly described in “The Great Casino Camouflage:”

“1.  Revenue from a tribal casino is used to acquire land areas adjacent to the operating casino. Casino revenue is also used to acquire lobbyists and litigators who then form a triumvirate of tribal council leaders, lobbyists and litigators to quickly influence, overwhelm or overpower county commissioners, local city council members and other community leaders. Lynwood, Illinois and Rhonert Park, California are at the front end of this process. Then...

2.  Land adjacent to the class III casino is acquired to establish a larger land base under tribal control. The Santa Ynez Valley is maturing through this stage. Additional land is used for either expanded gambling enterprises or other tribal, tax-exempt businesses that operate at a significant advantage over neighboring non-tribal businesses. Then...

3.  This process of expanding the tribal land base is repeated annually, with annual gambling revenue generated by the primary casino. As the land base increases, a tribal government headquarters appears within the land base, and the need for a tribal court, and subsequent tribal law enforcement emerges.  A “satellite” reservation has then been effectively constructed. Then...

4.  A very serious presence of a tribal government with governing authority over “Indian Country” or a “reservation” asserts its voice in all projects adjacent to the tribal land base. The tribal government voice is amplified substantially by supportive federal resources, fully intimidating state and local elected officials. Then...

5.  Large areas of a county or region have morphed into a separate tribal government, a separate “nation,” operating under its own rules and not those of the host state or county. Then...

6.  With hefty supportive resources of federal subsidies, gambling revenues, special preferences and tax-exemptions, tribal enterprises thrive and non-tribal enterprises within the region wither and die. Then...

7.  Failed businesses and additional properties are generally acquired by a tribe, and adjacent land values are impacted negatively, while adjacent property taxes are increased to offset the loss of state and county property and sales tax revenue that has either flushed down slot machines or disappears with each tribal parcel acquisition.” (Underline added.)

Enough said. Through Most Favored Nation status, tax exemptions, and market monopolies for tribes we fast approach economic blight areas throughout our state surrounding a prospective 145 authorized casino operations for 29 recognized tribes.

Washington citizens are, of course, free to vote for such measures in the name of their personal preference about smoking.

Please, do not complain next year to your friends and acquaintances who smoke about the fact that the tax collector is getting his due from you, too. Persons who smoke are already paying for nonsmoker’s kids to go to school under Governor Gregoire’s 60 cents per pack new cigarette taxes enacted in 2005 through SHB 2314.

Norman E. Kjono