Betting against the house

Here’s the first thing to understand about Propositions 94, 95, 96 and 97 on the Feb. 5 ballot: The people who put them there are going to spend at least $10 million to convince you to vote “no,” and the people who never wanted them on the ballot—who went to court to try to stop them—are going to spend at least $40 million trying to get you to say “yes.”

Confused yet?

If approved, each of the four ballot measures would allow large Indian tribes in Southern California to expand their casino operations dramatically. There’s one ballot measure for each tribe: the Sycuan, Pechanga, Morongo, and Agua Caliente.

The Pechanga and Morongo tribes will get to increase their numbers of slot machines from 2,000 to 7,500. The Sycuan and Agua Caliente groups would get bumped from 2,000 to 5,000. All in all, it represents an increase of 17,000 new slots in California, with a third of all machines in the state under the control of just these four big Southern California tribes.

In political ads bought by the four tribes, the measures are promised to provide up to $9 billion in new revenue to the state. The ads don’t mention that figure counts the revenue over 30 years, or that the independent California Legislative Analyst’s Office is predicting a far lower number.

Long before these propositions were put on the ballot, they took the form of gaming compacts, negotiated between each tribe and Gov. Arnold Schwarzenegger.

In 2006, when Schwarzenegger first introduced the compacts to the state Legislature for ratification, they didn’t appear to have much of a chance. Assembly Democrats in particular thought the compacts gave away too much for what the state got in return.

Compacts passed in 2004 covered five tribes, including the United Auburn and the Rumsey Band of Indians in Northern California. Those compacts had particular labor standards, environmental protections and expansion restrictions favored by Democrats.

Of particular interest to the labor movement were rules that provided for what is called “majority sign-up” or a “card-check” process for recognizing the union. Under card check, the union would be allowed to represent workers if a majority of employees sign union authorization cards. That makes it a lot easier to join unions, and it’s been a major cause for the U.S. labor movement.

From labor’s point of view, the 2004 agreements worked. Tribes that don’t have to follow these labor rules don’t have unions, but some 5,000 workers are unionized as a result of those compacts.

This time around, the tribes weren’t interested in making it easier for workers to unionize, and Schwarzenegger said OK. “I think he decided to make a political problem for the Democrats, to create a wedge issue,” said Assemblyman Dave Jones (D-Sacramento). If that was the intention, it worked.

“It basically divided [Assembly Democrats] in two,” said Steve Maviglio, Assembly Speaker Fabian Núñez’s spokesman. “It was a very difficult decision.”

In the summer of 2006, the agreements didn’t have the votes to pass the Assembly. In 2007, they did. What happened?

“For one, the changing budget climate,” Maviglio said. The state’s current $14 billion budget deficit is a bigger hole than former Gov. Gray Davis ever found himself in. “When it started to look like a choice between cutting programs and passing the compacts, the decision was made to pass the compacts,” Maviglio explained.

And though critics of the compacts point out that the Legislative Analyst’s Office estimates only $130 million a year in increased gaming revenue—in a general fund of $100 billion—Maviglio insists that “every penny counts.”

Many Democrats held out and voted no; still, the compacts cleared the last hurdle to go into effect. That should have been the end of it. It would have been, if not for the state’s leading hotel and casino workers union, UNITE Here, and its unusual allies among California racetrack companies, along with tribes who held 2004 compacts—including United Auburn and the Southern California Pala tribe, which suddenly found themselves stuck with comparatively bad deals.

The union began collecting signatures to put compacts to a vote on this February’s ballot. The four big Southern California tribes sued to stop them, arguing that because the compacts were basically treaties agreed to between two sovereign governments, they weren’t “referendable,” like other state laws.

The courts didn’t agree, which is good news for the unions and the other opponents of the gaming compacts—and great news for the state’s political-consulting industry.

The “yes” side has raised more than $44 million, as of press time. Almost all of that money came from the four tribes that stand to benefit from the agreements.

The “no” side had raised approximately $10.4 million. Much of that money came from non-Indian-gaming interests, like Bay Meadows and Hollywood Park racetracks. It also includes $4 million from the Pala Band of Mission Indians and another $2.5 million from the UNITE Here labor union.

Even with the budget woes facing California, it’s a little tough to understand why Assembly Democrats made such an about-face. After all, Núñez has deep ties to the labor movement (he worked as a union organizer before running for office).

One possibility is that the Legislature has another, and somewhat touchier, political situation on its hands.

The Assembly speaker and his counterpart in the state Senate, President Pro Tem Don Perata, are trying to get voters to support another controversial ballot measure: Proposition 93. The term-limits measure would reduce the number of years an individual could serve in the Legislature from 14 years to 12 years—but it also would allow the current crop of lawmakers, who would be termed out after this year, to hold onto their jobs for several more terms.

Had legislators torpedoed the tribes’ gaming compacts, they might have seen their own political careers cut short as well.

“I think the Legislature was very concerned about the tribes coming in and opposing term limits,” said Bob Stern with the L.A.-based Center for Governmental Studies.

Asked whether there was a connection between Proposition 93 and the gaming compacts, Maviglio insisted, “It’s almost laughable,” and dismissed the idea that the big tribes were interested in sinking the term-limits measure. “The tribes are pretty busy right now, spending every penny they have against each other.”

But it’s widely believed that California’s early presidential primary exists, in part, to allow sitting legislators to enjoy the extra time in office afforded by Prop 93. If the term-limits measure passes in February, termed-out lawmakers will be able to run for their seat again in the June primary.

If legislative leaders would go to the trouble of creating a third election in order to hold onto their seats, is it so hard to imagine that Núñez and his colleagues were doing some similar political triangulation with the gaming compacts?

“It’s all speculation,” Stern acknowledged. “But I think it’s pretty good speculation.”