HomePublicationsNewsletter ArchiveNewslettersVolume 21Issue 31MEDC Plans Scheduled Layoffs Due to Funding Cuts

On Tuesday, September 15, 2015, the Michigan Economic Development Corporation (“MEDC”) announced that it plans to lay off 65 of its staff as it faces budget cuts during the new fiscal year, which begins October 1.

“This new budget addresses fiscal realities that if left unaddressed, would have caused an inevitable interruption to economic development efforts across the state,” stated Steve Arwood, Chief Executive Officer of the MEDC. “The FY 16 budget takes immediate action to keep the organization on solid financial footing and bring strict focus to our core mission of business growth and attraction; community vitality; and, marketing our great State to a national and global audience.”

In August, the MEDC issued a statement partially attributing the cuts to the cessation of semi-annual revenue payments from the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians (“Gun Lake”).

Under its State-Tribal Gaming Compact, Gun Lake in the past provided  semi-annual revenue payments to the state based upon a sliding scale of between 8-12 percent of net win from electronic games of chance. Gun Lake separately provides payments to local units of government to mitigate costs associated with the operation of the Gun Lake Casino, calculated as 2 percent of net win from electronic games of chance.

As of June 1, 2015, Gun Lake ceased providing its state payments based upon the tribe’s interpretation of its State-Tribal Gaming Compact.

The compact has provisions providing for a reduction and/or cessation of revenue payments if the state introduces competing forms of gaming in the Tribe’s exclusive territory. Under the Indian Gaming Regulatory Act, states are prohibited from taxing tribes, and past precedent has only allowed states to share in revenue if the tribe receives something of value in return in the compact (such as an exclusive territory).

Several media reports have indicated that Gun Lake believes that the state’s authorization of online lottery sales and certain new gaming machines violates the exclusivity provision in the tribe’s market area.

 

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