“This is just delaying for one quarter the budget hearings, and if the projected numbers from the casino go up, then we can start looking at reallocating that into the appropriate programs based on the needs of the programs,” said Vice Chairman David Wolfe, who introduced the resolution together with Chairman Adam Wachacha, during a July 7 Budget Council meeting.
In the budget approved for Fiscal Year 2020, casino revenues accounted for 51.2 percent of the tribe’s overall budget, but those revenues have taken a beating due to the pandemic. The casinos in Murphy and Cherokee were closed completely from March 18 through May 12, on May 13 opening on an invitation-only basis. The facilities have been open to the public since May 28, but with limited capacity and safety precautions in place.
Caesars Entertainment, Harrah’s parent company, warned its properties to brace for pulling in just 30 or 40 percent of what is typical, said Secretary of Finance Cory Blankenship during an April 29 update, but Cherokee’s properties were optimistic that they could achieve about 70 percent of expected levels. In formulating a proposed budget, Principal Chief Richard Sneed aimed between those two figures, basing the spending plan on 50 percent of normal casino projections.
This does not mean that the tribal budget for 2021 will be half the size of that adopted in 2020, however. The 2020 budget was based on 80 percent of casino projections — not 100 percent — and casino revenues account for only about half of total revenue.
“Essentially what that does, holding at 50 percent, is it reduces our projected revenue to the tribal government from all sources — so government and per capita — by about $121 million,” Blankenship told Tribal Council during a July 7 Budget Council meeting.
The main goal of the 2021 budget will be to maintain services as well as pay and benefits for all current tribal employees, said Wolfe. The proposed budget will allow all employees to keep their jobs.
While the tribal government did not disclose the size of last year’s adopted budget, the budget for fiscal year 2019 totaled $564.3 million with an operating budget of $179.4 million.
Typically, in February the finance office will send budget workbooks listing known costs to each program. The programs then add in any needs or wants and propose a budget back to finance. Using that information, a proposed budget is developed and sent to Tribal Council, with hearings scheduled so that the individual programs can argue for any changes they believe to be necessary for their particular budgets.
This year, tribal offices were closed during the time when that cycle would typically take place, and because of the massive uncertainty caused by the pandemic Blankenship’s office took a hard percentage off of each program’s existing budget rather than going through the usual process of consulting about needs and wants and priorities.
“What we envision as part of this process is let’s adopt a budget that gives us a strong starting point, that gives us enough funds in those budgets to keep services functional, and then let’s see where we are with revenue,” said Blankenship.
Come January, he said, he’d like to be able to add $10 to $15 million back into the budget. However, this is new territory for everyone, and nobody knows how casino revenues will fare over the coming year.
“We don’t know right now what our revenue’s going to look like coming from the casino,” said Sneed on July 7. “Right now it looks good, but we don’t now if that’s going to be sustained. We don’t know if we’ll have to shut down again.”
As of July, the casino was seeing a smaller number of visitors than is usual for the summer, but those people were spending a larger amount of money on average, said Sneed. But there’s no way to know if that trend will continue.
“We have never been this unsure about what our revenues are going to be,” said Big Cove Representative Perry Shell. “We have an idea what our expenditures would be based on the past, but we have no concrete estimate like we have had in the past of what the gaming revenue will bring in. We don’t have that now, and I think this is a smart way to do that, to keep those things that are essential in place.”
Some councilmembers disagreed with that assessment, however.
“I think we need to just start having our budget hearings and see what happens from now till October,” said Wolfetown Representative Bo Crowe. “It might turn completely around from now till then. That’s my thoughts on it. I’m not in favor of this.”
The resolution ultimately passed, however, with a weighted vote of 45-31. In favor were Snowbird Representative Bucky Brown, Yellowhill Representative Tom Wahnetah, Wolfetown Representative Chelsea Saunooke, Shell, Wachacha and Wolfe. Opposed were Big Cove Representative Richard French, Painttown Representatives Tommye Saunooke and Dike Sneed, and Crowe. Birdtown Representatives Albert Rose and Boyd Owle were absent.
The current fiscal year ends September 30. During the Aug. 4 Budget Council meeting, Tribal Council voted to table the proposed budget, making a September adoption likely. Sneed’s office declined to release a copy of the document to The Smoky Mountain News, stating that the document is classified as a work product that can be accessed only by request from a tribal member.