Schwarzenegger’s
Real Test of Strength
By Rachel Marsden | Bio
Speaking
at the Republican National Convention, California Governor Arnold Schwarzenegger
praised, in the same breath, former President Richard Nixon and the concept of
American free enterprise. Both
mentions took a lot of guts. The
former because it was the first time anyone speaking at a Republican convention
since Watergate had uttered Nixon’s name, and the latter because
Schwarzenegger’s position on an important issue in his own state flies in the
face of free enterprise.
On
November 2, 2004, the people of California will vote on Proposition 68. The
measure will ensure that the 64 native tribes who operate 53 casinos and have a
total monopoly on gaming will start paying 25% of their net win revenues to the
state. To date, natives haven’t
had to pay a penny in tax on their casino profits.
Instead, they’ve been using the money to buy off politicians in order
to keep themselves in the way to which they’ve become accustomed.
This kind of influence peddling has turned native tribes into political
kingmakers. For example, they
donated $2 million last year to Schwarzenegger’s recall opponent, Cruz
Bustamante.
If
Proposition 68 passes, and even a single one of the casino-operating tribes
fails to bide by it, then the natives will automatically lose their monopoly on
slot machines. Non-native businesses currently operating five racetracks and
eleven card clubs in the state will be allowed to get their hands on the slot
machines and use them as a means to increase their bottom line.
These folks will have to pay 30% of their profits to the state and an
additional 3% to local governments. Of
course, this would be best scenario for the state because it’s the formula
that maximizes cash flow into government coffers.
Schwarzenegger
ascended to the governorship as the result of a rare recall election in which
people couldn’t drop-kick his predecessor (Gov. Gray Davis) out of Sacramento
fast enough. Davis turned the state
into a mess by running up the debt and pandering to special interest groups.
You
would think that Schwarzenegger would want to use the Proposition 68 debate to
prove that he really is all about debt-reduction and free enterprise, and that
he wouldn’t dare pander to special interests. Instead, Schwarzenegger has come
out swinging against Proposition 68, and has even used $150,000 from his own
“California Recovery Team” committee war chest to supplement the natives’
own millions.
Schwarzenegger
ought to be encouraging the proposition, given that if it passes, it would mean
that money would pour into state coffers--either from the natives, or from
non-native interests in the case where the natives refuse to abide by the law
and default on their monopoly. It’s
a win-win situation. But
Schwarzenegger is trying everything he can trying to rob the state of this
desperately needed cash: He’s
going around prior to the public vote on the proposition trying to negotiate
deals with individual tribes. So
far, he has succeeded with only five of them.
Five out of sixty-four. Ninety
percent of the other tribes are still paying zip-all to the state.
Obviously Schwarzenegger must figure that California doesn’t need the
money that badly.
And
so much for the spirit of “free enterprise” for which Schwarzenegger says he
admired Nixon. By opposing Proposition 68, Schwarzenegger is advocating in
favour of protectionism. If the
natives do default and refuse to pay their fair share of taxes under Proposition
68, then they’d have to compete with other gaming venues for customers and
revenue. It might be a bummer for
the natives, but free competition has always meant better deals for customers.
Native
casino interests have been pouring money into a negative advertising campaign to
fight the proposition, which begs the question: If they had any intention of
paying the tax anyway and not planning to default on their obligations under
Proposition 68, then why are they so worried?
The
ads may as well just say, “When you gamble, kittens die and Baby Jesus
cries.” It would be about as
legitimate as the fear-mongering, ridiculous arguments they’re already making.
The
ads state that putting slot machines in non-native casinos would mean more crime
and increased traffic congestion. They
suggest that the non-native slot machines would be located “near 200
schools”. Wow, a whopping 200
schools clustered around 11 card clubs and 5 racetracks? Please.
And installing a few slot machines inside pre-existing facilities will
lead to traffic gridlock in urban California?
Come on. That’s like
saying that because some guy smokes three cigarettes a day on his coffee breaks,
he’s contributing to global warming.
The
notion that crime is associated with people pulling levers and watching little
graphics of lemons, grapes and cherries spinning around while lights and
whistles go off is sheer lunacy. I
mean, think about it for a second. What
rampant, horrible crimes are really, truly committed in and around casinos?
To give you an idea of how desperate people are to make the association,
a local paper in my hometown of Vancouver, BC, recently did a feature on the
‘perils’ of a gaming lifestyle. The
most heinous ‘gambling-related crime’ they could identify was one involving
a man convicted of beating and strangling his wife to death after he was
“provoked” by her wild gambling sprees and her demands to be paid for sex.
Just a little bit of a stretch here to blame all of this on a casino.
In
another example, a man runs around committing robberies in order to get gambling
money. Yes, it’s sad that some
people are addicted to blowing their money on slot machines, but slot machines
don’t make people destitute. It’s
like telling an overeater that he can’t go to McDonald’s anymore; it’s not
going to stop him from inhaling the contents of his own refrigerator.
People
who are so obsessed with gambling that they just can’t control themselves will
find another way to indulge in their habit--namely by using one of the many
gambling websites available on the Internet.
A junkie is going to get his fix anywhere.
At least if slot machines are taxable, the state can use the revenues to
fund anti-addiction programs to benefit these people.
There’s
only one feasible, logical reason why Governor Terminator would deny state
coffers much-needed revenue by opposing Proposition 68 so publicly:
because to slam the door on the kind of potential campaign money that
natives could offer him isn’t such an easy thing to do.
Just ask Gray Davis. Earlier
this year, the Las Vegas Sun reported that “Schwarzenegger campaign advisers
said [he] had not ruled out accepting contributions from the same groups whose
money he turned down during his recall campaign against former Gov. Gray
Davis.” In the story,
Schwarzenegger’s chief political fundraiser, Marty Wilson, was quoted
assaying, “We are always evaluating and re-evaluating our campaign
contributions.” Indeed they did
during the recall campaign when Schwarzenegger initially said that he wouldn’t
accept any campaign contributions at all, but later ended up taking in millions.
Rachel Marsden is a political strategist, columnist and talk show host whohas worked in politics and the media in both the USA and Canada. Her website is www.rachelmarsden.com