COMMENTARY: Bellwether

by Jul 15, 2020OPINIONS





I have been reading a book about a hurricane that hit the east coast during the latter part of the 18th century. If you will recall, the east coast was pretty much all European America during that time period. Expeditions were taking place, but anything beyond the Blue Ridge mountains was pretty much “unsettled” (even though Indians had been living there for 10,000 plus years). The book talks about the nearly complete lack of warning the colonists had when bad weather, like a hurricane, would come. They did not have radar, sonar, satellites, or any gadgets that our meteorologists have today. In fact, you probably have access to more forecasting data on your phone than all the world had back in that day.

We are a people of signs. We watch nature and look for the way things in it speak to us. When the wind blows and turns the leaves over on the trees, we know that a storm is near. By the shade and time of day the clouds are pink in the sky, we know that we may expect a certain type of weather. If the animals start gathering food early in the late summer, we know to anticipate a harsh winter. We know this, in part, because our fathers, mothers, grandfathers and grandmothers taught us so, and because, over a period of years, we have a history to review and rely on the consistency of whatever marker we look for. For example, when the leaves are blown over on the trees, if it is followed by a thunderstorm nine out of 10 times.  Then, the next time I see those leaves blown over on the trees, we are preparing for a storm.

In terms of the economy, we are in a turbulent time. One might say the leaves are blowing over on the trees. We have been and are a very blessed, very prosperous nation as the Eastern Band of Cherokee Indians. But, we have taken a financial hit that is unprecedented in modern times. Fortunately, we have leaders who are monitoring trends and evaluating markers to help guide us through the storm. Unfortunately, we tend to spend beyond our needs and our means. Fortunately, we have leadership who began years ago to see the need for increased fiscal accountability and frugality. Unfortunately, the economic crisis came quickly and the reductions in revenue are more crippling than we could have predicted. Our leaders are still evaluating the damage that has been done and the potential damage to come. Fortunately, we were financially strong when the storm hit. Our coffers were full. Unfortunately, because of the huge municipal infrastructure of our nation, coffers may be depleted faster than they may be replenished in the current economic environment.

The wind is not just blowing the leaves over. It is shaking the trees.

With that, I will yield the balance of my time (sorry, I couldn’t resist that) to our tribal leadership. Keep in mind that I am giving you quotes out of context, so I encourage you to watch and listen for yourselves the entire session of Budget Council from Tuesday, July 7. These quotes start about 50 minutes into the session. These are excerpts from a discussion concerning proposed Res. 192 (2020) which would postpone the tribal budget hearings until after the first quarter of the next fiscal year.

Councilman Perry Shell of the Big Cove Community

“We had no income for a period of time. A budget is just an estimate. It is not hard numbers. The situation is that it is an estimate of expenditures and an estimate of revenue for a period of time. We have never, ever been this unsure about what our revenues are going to be. We have an idea of what our expenditures would be based on the past, but we have no concrete estimate like we have had in the past with the gaming revenue that we have been bringing in. We don’t have that now. I think this is a smart way to do it (the proposed legislation to postpone budget hearings until first quarter revenue is realized). This is all we can do. We don’t know. We are just too unsure at this point. As revenues go up, or go down. They might go down. This might get worse than it already is.”

Tribal Council Chairman Adam Wachacha of the Cherokee County/Snowbird Community

“From the get-go I kept saying that this needs to be our eye-opener to start looking to create revenue, other sources of revenue to overcome the deficits that we are looking at based on the one cash cow that we have sitting in Painttown and Cherokee County. That we need to start finding other sources of revenue to offset that deficit cause it ain’t just gaming operations that we are worried about, competition wise, its COVID and everything else so I hope this is our Tribe’s eye-opener for moving forward.”

EBCI Vice Chief Alan B. Ensley

“We have never seen the times that we are in right now. I think we need to have a good understanding of exactly where we are at and, like Perry said, we don’t know where we’re at. That’s the scary part that we have got to try to deal with. Me and the Chief, we have had I think two Executive meetings. We have to just bottom line employees. We have hard discussions on whether or not to let that position be advertised. That is where we are at today. We really need to be careful. I like the reports we got from the TCGE Chairman that showed the percentages that were coming into the gaming operation. Stuff like that is what we’ve got to learn to pay attention to more so than ever before. We have all talked about diversifying. I think Council needs to pat themselves on the back. A lot of people don’t know the meetings and stuff we’ve done during the closed period. We have went out on diversifying this Tribe more than ever before in closed meetings that the general public don’t know about.”

Tribal Treasury Secretary Cory Blankenship

“When we had to pick that revenue target of 50 percent, and again, it is not cutting the budget by 50 percent. It is moving us from where we were at 80% of projected (gaming) revenue to 50 percent of projected revenue. So, it is not a 50 percent across the board cut to the Tribal budget. Based on the revised forecast numbers, which we continue to analyze, that would put us from 80 percent of budgeted revenue to about 75 percent of budgeted revenue. So that is how much the projected revenue has decreased based on current state of operations. So I think what you are going to find is that unless we make some decisions now, those decisions are going to be made for you in just a matter of a few months. And then we are going to have conversations about what services and what programs go away because we don’t have the cashflow to support them.”

Councilwoman Chelsea Saunooke of the Wolftown Community

“I never thought in my lifetime that we would be going by a needs-based budget or performance-based approach. I know growing up I always thought ‘we waste a lot of money’. It took a pandemic to come in and hit us hard to get us to this point. It shouldn’t have taken a pandemic. But we are a wealthy tribe. And even though we are wealthy, we don’t need to live like there is no tomorrow.”

Tribal Council Vice Chairman David Wolfe of the Yellowhill Community

“This is actually the second test the Tribe’s going to have to endure. The first test was the 2008 recession. The Director of Finance was almost in tears because we were right at 98 percent of the gaming revenue that was projected with no cushion. And we had the Balance Budget Act that requires us to stay in balance.”

EBCI Principal Chief Richard Sneed

“I don’t know that any of us ever thought we would be here, however, you all will remember that we had some pretty hard conversations in years past about budgets. We talk about gaming competition. This is kind of a foretaste of what that would be like. A $120 million budget shortfall. This is what it looks like. This is what it feels like. I think the point that is really important for everybody to understand is that we don’t know right now what our cash flow will be with the revenue coming from the casino. Right now it looks good but we don’t know if that is going to be sustained. We don’t know if we are going to have to shut down again. Right now, we don’t know. We have been able to go back historically. We could go back 20 years and look for the last 20 years and see this nice upward trajectory, except for 2009-10, when it kinda got flat. Now, we don’t know. This is one of those unknown variables right now. What we do know is that if we are budgeted at 50 percent, we can fund everything, nobody loses a job, we keep on rolling. We just don’t know what the revenue picture is going to look like. It’s great, like right now people are spending a lot of money. It’s a smaller number of people coming to the casino but they are spending more as individuals. Is that trend sustainable? I doubt it. I don’t think it is. Are we going to get to a point where we are going to be able to increase our capacity to 40, 50, 60 percent or even full capacity? Don’t know the answer to that one either. Are we going to have to shut down again? It’s possible. If we have an outbreak at the casino and we get clusters, what the public health folks call clusters, yeah, we could shut down again. So, the revenue we are enjoying coming in right now, and we are happy and blessed to have it, that could go away as well. So there are just so many unknowns.”