Tribal-compact revenue estimates lowered

The Department of Finance has lowered the estimate for the financial contribution to the state from the five amended tribal-gaming compacts from $506 million to $382 million for the 2007-2008 fiscal year.

The changes were detailed the revisions in a letter sent Thursday to two dozen legislators, consultants and budget officers. The letter cites California “testimony presented by the tribes” during hearings on the compacts in the Senate Governmental Organization Committee hearings held on April 10-11. It also notes “two tribes will not be adding devices at the level originally thought, and it will take more time to receive and install the new devices than assumed.”

Many budget analysts, including the nonpartisan Legislative Analyst, have voiced skepticism about the administration’s budget assumptions regarding the compacts. In his January proposal, Schwarzenegger estimated the state would receive more than half a billion dollars from the five pending new compacts.

The Department issued the original estimates on January 10 during Governor Arnold Schwarzenegger’s annual early year budget presentation. The letter states “if we knew then what we know now,” not only would the current year estimates be lower, but the 2008-09 estimate would also be reduced from $542 million to $428 million.

The letter goes on to note that even this year’s lower estimates won’t be met if the compacts aren’t approved by May 15. Each day after that, the letter says, will cost the General Fund $1.26 million.

The letter also notes that the administration plans to transfer $40 million of the gaming revenue, starting in 2008-09, to shore up the Indian Gaming Revenue Trust Fund. Copies were sent to both the Senate and Assembly Appropriations, Budget and GO Committees, as well as Legislative Analyst’s Office and the State Gambling Control Commission.

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