Speak Your Piece: Red-State Roulette

Facing a nearly half-billion-dollar budget shortfall, North Carolina is fast forming a dependence upon Indian gaming to help pay the state’s bills.

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From the town of Murphy in Western North Carolina’s Cherokee County, it’s 365 miles to the state capital in Raleigh. The last big state highway project here in this far mountain county took 22 years to get started.

That’s certainly not the case with the site preparations for the planned 2015 Harrah’s Valley River Casino and Hotel just east of this county-seat town that has a population of 1,601.  This work is proceeding at an uncommon pace.

After Principal Chief Michell Hicks and his Eastern Band of Cherokee had settled in 2013 upon a location for the $109 million casino and hotel, things began to happen fast with the project’s transportation elements.   It took the N.C. Department of Transportation only five months to let the contract for the bridge into the location, and only four more months after that to let the contract for the roadway from there to the edge of Indian trust land.  There, on 85 acres the tribe will reign more or less sovereignly. It also will be meeting a rather severe monthly-payment schedule it’s agreed to with the state government. 

Last week at the Qualla Boundary reservation near Murphy, I caught up with Principal Chief Hicks.  I asked, is the site preparation near Murphy going fast enough for you?  “It’s going pretty good, bureaucracy being what it is,” Hicks replied. “I like what I’m seeing so far.”

This is a big trend in the South. Florida, Louisiana and Mississippi also have Class 3 casinos – the category of gaming establishment that allows slot machines, roulette, black jack and other forms of legal gambling.

N.C.’s Budget Shortfall

The stronghold of the Republican Party is this southeast corner of America.  In one state capital after another, the GOP is proving to be a cost-cutting machine. The North Carolina General Assembly will likely be further wielding its scythe on former Democratic programs as it convenes today (May 14) in Raleigh. A sobering prelude to this 2014 “short session,” as it’s called, came earlier this month.  Gary D. Robertson of the Raleigh Associated Press reported that the state “faces a $445 million revenue shortfall when the fiscal year ends June 30… Revenues are now predicted to fall 2.1% short of the $20.6 billion the legislature said it needed to carry out this year’s budget.”

Remedies for such state budget woes as that include measures Southerners from, say, the World War II era might never have anticipated.  Take Harrah’s Cherokee Casino on the Qualla Boundary reservation, for example.  This is a subdued and well-appointed round-the-clock house of dreams. It dates to the 1990s and gained Class 3 status in 2012. In its 150,000-square-foot gaming space, hundreds of unsmiling and rather intense patrons may be found gambling in the middle of the afternoon.    

In the casino’s hallways where you take a break to pace, think and gather yourself, there are pronouncements in red that scroll across the screens of electronic message boards upon the walls. These are disclosures for those inside the building of what the management reveals to be the millions of dollars in payouts for the gambling patrons. Now I’ve noticed that these message boards all seem to be near discreet bank ATMs. So the one provides the incentive and the other provides the cash.

Outside the casino in the real world, the payouts to gamblers — and more importantly for this article — the payouts to the state of North Carolina under a 2011 compact aren’t public records. So unless an average citizen drives to the reservation and stands in front of one of those electronic message boards constantly to write down the figures shown, it’s not possible for persons outside the management to know how much of the state’s current shortfall can be made up by Indian gaming. 

It was North Carolina’s last Democratic governor, Bev Perdue, and not any GOP state chief executive who drove a hard bargain with Michell Hicks in 2011.  When he and the other tribal leaders drove away from Raleigh, Hicks’ signature was on a tribal-state compact with a severe payment formula that will last until he’s an old man.  The formula is for steadily rising amounts off the top of the gaming casinos’ gross revenues to be paid to state government as follows: 4% for the first five years; 5% percent for the next five; 6% for the next five; 7% for the next five; and 8% for the next 10.  The amended restated compact is careful to say all this isn’t taxation. It’s a “mutually agreed-upon benefit to the parties.”

A Long-Term Pact

I might add it’s a harsh long-term pact, too. No wonder the tribe rolled the dice, so to speak, and immediately began planning a second Class 3 casino on trust land 57 miles west near Murphy.  Another factor in Hicks’ risky and visionary move has to have been the rather mediocre semi-annual per capita payments that the Eastern Band has been making to what the tribe’s One Feather newspaper says is its 15,000 members.  This amount will be $4,023 this June 30, according to Caitlin Bowling of the Smoky Mountain News of Sylva, North Carolina. So if the figure for the last six months of this year matches that amount, then each member will receive only $8,046 from the existing casino for the year 2014.

An artist's rendering of the proposed entrance to the casino district near Murphy, North Carolina.

How will that grow once Harrah’s Valley River Casino and Hotel is in operation here? “Oh, the casino here will ultimately far out-do the other,” said Barbara Palmer Vicknair of Murphy. She is a tribal member who has served on both the Cherokee County Board of Commissioners and the Murphy Town Council.

"CASINOS HOLD SWAY, in various forms, in 39 states,” J. Freedom du Lac wrote in the Washington Post in November 2013.  “The holdouts… could fit around a single, 10-handed poker table.”

The Southern holdouts include Georgia, South Carolina, Virginia and Tennessee, according to the state-by-state list at the National Indian Gaming Commission web site.

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The last big state highway project here in Cherokee County was the 1986-2008 U.S. 64 relocation of 4.9 miles by N.C. Dept. of Transportation from the center of Murphy to east of N.C. 141. This culminated after clearances by Tennessee Valley Authority, Federal Highway Administration, U.S. Fish & Wildlife (whose biologists in diving gear netted 84 native freshwater mussels and moved them upstream in the Hiwassee River), U.S. Army Corps of Engineers and the State Historic Preservation Officer.  From saving mussels to the budget, this environment comes through.

Specialized and trained employees tend to move among Harrah’s locations, so how many new jobs will the Cherokee tribe’s Harrah’s Valley River Casino and Hotel actually bring to the state’s only county named for it?   How will traffic increase in a county seat with a population of 1,601, not a few like me, behind the wheels of well-worn pickup trucks?  We residents soon will have some answers to these questions as the pace of life quickens here.

Tom Bennett is a retired Atlanta newsman.

 

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