Tribe to vote on FY2020 budget
Tribal Council is slated to vote on a budget for the fiscal year starting Oct. 1 on Thursday, Sept. 12, but no draft document has been released to the media.
In an Aug. 2 interview with The Smoky Mountain News about his candidacy for re-election, Principal Chief Richard Sneed said that the proposed budget for 2019-20 is evidence of the “extremely robust stewardship” his administration has demonstrated over the tribe’s resources. While 10 years ago tribal government would typically budget for 100 percent of projected casino revenue, the budget Sneed submitted last year was “the most fiscally conservative in a decade” at 82 percent of casino projection, and the proposed budget for 2020 is based on 80 percent of casino projection.
The dollar amount of the proposed budget has not been announced, but the fiscal year 2019 budget totaled $564.3 million, of which $180.5 million constituted the operating budget.
“Our goal is to have a sustainable financial mechanism in place to fund program services so that all the benefits that we enjoy, the employment opportunities, the services we provide for our people will be able to be sustained for generations to come,” Sneed told Tribal Council on Monday, Aug. 5, which was the first of four days of budget hearings.
In addition to cutting back on percentage of casino projections, said Sneed, for the first time in the tribe’s history the budget will not add any full-time positions to the existing roster.
As far as revenue goes, said Treasury Secretary Cory Blankenship, casino and grant funds are up year-over-year, while income from the tribal levy is flat. Occupancy tax is up as well, due to a rate increase from 3 to 4 percent.
Operational expenses for the new fiscal year are slightly down while labor expenses are up 3.8 percent year-over-year due to a 2 percent budgeted merit increase as well as a 1 percent health insurance cost increase and a 2 percent increase in the indirect cost rate, which has grown from 27 to 29 percent. The tribe is currently carrying more than 100 vacant positions, with a combined budgeted value of $7.4 million.
“Historically, labor expenses grew at a rate of 10 percent or more, which is unsustainable given that revenues grow between 2 and 4 percent each year,” said Blankenship. “We have been successful in slowing that labor expense.”
Eventually, Sneed said in his Aug. 2 interview, he’d like to see the budget get down to 75 percent of casino projections. If that goal could be achieved, and held for multiple years without adversely affecting programs, Sneed would propose an ordinance requiring budgets to stay at or below the 75 percent mark.
After four days of budget hearings in which Tribal Council went through each program’s proposed budget, the body voted to accept those requests — as previously vetted by the treasury department — as part of the proposed budget for fiscal year 2020, which will receive a final vote in September. The proceedings were unusually non-contentious, Blankenship said in comments at the end of the final hearing session.
“This is the first time in the tribe’s history that there has been no changes out of council, so congratulations,” he said.
While the proposed budget met favor from council, The Smoky Mountain News has not had the opportunity to view the document, which will govern the spending of hundreds of millions of dollars.
After submitting a series of requests to Sneed’s office beginning Aug. 6, SMN received a reply Aug. 16 stating that the budget — as well as a 2018 budget-to-actual report prepared during the budget process — would be available only after Tribal Council approves it Sept. 12.
“Until the budget is approved by Tribal Council in the September session, we are not yet ready at this time to release the budget and accompanying documentation requested,” Sneed wrote in a follow-up email Aug. 19.
According to Attorney General Michael McConnell, the draft budget is a public document available under the tribe’s public records law. However, he said, his interpretation of the law is that the tribe is required to disclose such documents only to tribal members and their representatives — nobody on staff at SMN fits either category.
“To date, I am aware of just one request for a copy of the proposed budget document,” McConnell wrote. “The person making that request was informed over three weeks ago that the document is available for inspection.”
Tribal members can inspect the document at the Eastern Band of Cherokee Indians Department of the Treasury, McConnell said. Because the document is more than 700 pages long, the tribe prefers that people come in to look at it rather than requesting copies, though copies could be furnished if the requester were willing to pay for the cost of replication.