Schwarzenegger Far Off the Mark on Tribal Governments

Press Release
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Schwarzenegger Far Off the Mark on Tribal Governments

September 23, 2003

Tribal casinos are government enterprises, similar to state lotteries, municipal and county airports and hospitals and other revenue generating government activities, and as such are not required by law to pay taxes.

Yet virtually all revenues from tribal government casinos are used to provide government services for tribal members.

Film actor Arnold Schwarzenegger, a Republican candidate in the Oct. 7 recall election in California, ignores these basic facts in a television advertisement that began running statewide on Monday afternoon.

“Mr. Schwarzenegger’s misstatements come as no surprise to those who have been following his campaign,” Brenda Soulliere, chairwoman for the California Nations Indian Gaming Association, said Tuesday.

“But his erroneous remarks, which exhibit a complete and almost frightening lack of understanding of the legal status of Indians and tribal governments, are hurtful to California’s more than 300,000 Native Americans.”

Schwarzenegger says in his television advertisement, “Their casinos make billions, yet pay no taxes and virtually nothing to the state.”

As government operations, tribal gaming revenues are not taxed by other governments. However, revenues from tribal government casinos are essentially taxed at a rate of 100 percent, with all revenues providing for the welfare of tribal members.

In addition, some 41,200 employees working at tribal gaming facilities pay more than $280 million a year in federal income and payroll taxes. Ninety percent of tribal government workers in California are non-Indians.

Only enrolled tribal members living and working on their own reservations are exempt from paying state payroll taxes. Indians living off the reservation pay the same property, sales and other taxes that all Californians do.

“California state government does not pay taxes. Its citizens do,” said CNIGA Executive Director Jacob Coin. “Indian governments also do not pay taxes. Indians do.”

Schwarzenegger also says in his advertisement, “Other states require revenue from Indian gaming, but not us. It’s time for them (to) pay their fair share.”

That statement is false. As a result of tribal-state compacts approved by the California Legislature, tribes pay more than $100 million a year into a fund established to pay for the impact of gaming on local communities.

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