Tribal compacts nearing expiration at month's end

Sunday, September 7th 2003, 12:00 am
By: News On 6

OKLAHOMA CITY (AP) -- An official believes the state is close to reaching agreements with several Oklahoma tribes whose tobacco compacts expire this month.

But the optimism by Secretary of Finance Scott Meacham, who is negotiating the compacts for Gov. Brad Henry, isn't shared by some tribes.

Tobacco compacts with 13 tribes, which already have been extended twice, will expire Sept. 30. If they run out, the agreement continues under existing terms.

"I strongly believe that whatever we do needs to be approved by the Legislature," Henry said last week.

Meacham has set October as the goal for a "conceptual agreement" with the state, tribes and the horse industry in Oklahoma, which stands to gain from a compact that will allow racetracks to add additional gaming.

"Of course, then we'll have to draft the compact so the Legislature can review it, but if we are going to have this done by the start of the session we only have so much time," he said in a story in The Sunday Oklahoman.

Osage Nation Chief Jim Gray said he doesn't understand the urgency of the compact negotiations.

"It doesn't make sense to continue negotiations that are nothing more than an ultimatum," Gray said.

Tribes pay 25 percent of the state's 23-cent cigarette tax on the products they sell. The state wants to increase that to 50 percent of the state tax if Oklahoma's tobacco tax is increased, Meacham said.

Gray said tribes use revenues from tobacco sales to fund tribal government programs.

If the new compacts are signed, and if the state raised its cigarette tax, the 13 tribes under the new agreement would be at a severe competitive disadvantage, Gray said.

"The tribes wouldn't be able to compete with the other tribes who would not have the higher tax. Additionally, right now tribes near our state borders have a price advantage over neighboring states," he said.

"That draws customers from other states and brings new money into Oklahoma. Raising taxes won't mean more money for Oklahoma, it will mean less."

Meacham said several of the tribes have banded together during the negotiations and are recommending that the current compacts roll over for another 10-year period. The state won't agree to that, Meacham said.

State officials recognize the complexity of the border competition and competition among the tribes, and are negotiating those positions, Meacham said.

If the tribes do not compact with Oklahoma, their tax burden increases to 75 percent of the state's 23-cent cigarette tax.

Gray believes gaming compacts should be negotiated differently. He said if the state opened up Class 3 gaming, it would provide more revenue, create more jobs and grow Oklahoma's tourism market.

"If we are going to do a compact, let's do a real Class 3 compact, similar to that in Arizona and New Mexico," Gray said. "I'm all for that discussion. If not, what are we compacting for that we don't already have?"

Meacham said he understands Gray's logic, but doesn't believe Oklahomans would support Class 3 gaming.