Jonathan July 2019 MASHANTUCKET PEQUOT TRIBAL NATION Taylor ECONOMIC IMPACT OF THE This study was sponsored by the Mashantucket Pequot Tribal Nation (MPTN) and conducted under a contract with the Taylor Policy Group, Inc. (TPG). TPG is an independent consulting firm unaffiliated with MPTN. The views expressed herein do not necessarily reflect those of the funding organization or of the institutions with which the author is affiliated. MPTN provided information and photographs not otherwise cited or credited. This report is set in Matthew Butterick’s Concourse. Design by Amy Besaw Medford. This work is licensed under the Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/ or send a letter to Creative Commons, PO Box 1866, Mountain View, CA 94042, USA. 2019 Mashantucket Pequot Tribal Nation 2 Matt’s Path Mashantucket, CT 06338 The Taylor Policy Group Taylor Policy Group, Inc. 1070 Iyannough Rd., Ste. 315 Hyannis, MA 02601 Findings in Brief The Mashantucket Pequot Tribal Nation’s enduring nature as a government, its continuous occupancy of a 350-year old reservation, and recognition of those facts in law determine the economic character of its effects on Connecticut today, the subject of this report. In fiscal year 2017, employees of the Tribe’s government and business enterprises earned more than $180 million in regular and overtime earnings, plus $144 million in benefits (the bulk of which were medical and dental insurance, paid leave, and 401(k) contributions) for a tribe-wide total employee compensation of $324 million. Thirty years of research now makes clear that American Indian economic growth arises not from federal aid or program design, The Mashantucket Pequot Tribe withheld $31 million in federal but rather from tribes’ asserting their sovereignty, building income taxes, $8.8 million in state income taxes, and $40 institutions to exercise that sovereignty, and designing those million in Social Security and Medicare taxes. In addition to institutions in alignment with Indigenous culture. these amounts, the Tribe’s tenant stores and restaurants paid compensation and withheld taxes too. The Mashantucket Pequot Tribal Nation (MPTN) stands in the vanguard with the tribes that demonstrate both the validity of The estimated direct, indirect, and induced impacts of the 2017 that research and the benefits of American Indian economic economic activity of the Mashantucket Pequot Reservation growth for surrounding communities. totaled $1.1 billion for the Connecticut economy. Mashantucket Pequot Reservation economic activity supported nearly 12,500 To attract and accommodate customers from beyond the local jobs in Connecticut in 2017. population, the MPTN has invested more than $2.7 billion in Foxwoods Resort Casino since inception. Under the terms of intergovernmental agreements with Connecticut, the MPTN and the Mohegan Tribe have made Foxwoods and the Tribe’s allied businesses attract more than payments to the State over the past 25 years that amount to 12.8 million visits per year—an average of 35,000 visits daily. nearly $8 billion. Over its lifetime, Foxwoods has hosted 300 million visits, the rough equivalent of every living man, woman, and child in In 2017, Mashantucket Pequot Reservation economic activthe US today. ity yielded $145 million in direct Connecticut state and local government revenue; Indirect and induced economic activity At the end of 2017, 9,702 people were employed at the added an estimated $52 million to Connecticut’s total. Mashantucket Pequot Reservation, as follows: Connecticut’s realized revenue from the Mashantucket Pequot • MPTN employed 544 people to do the work of and Mohegan Tribes in the fiscal year ended June 30, 2018 its government. ($273 million) is almost a third the size of the $921 million • Foxwoods and other tribal enterprises that Connecticut realized in corporation tax revenue that year. employed 6,772. • An additional 2,386 people worked in non-tribal MPTN’s economic and fiscal benefits to Connecticut never retail stores and restaurants on the reservation. required any tax abatement, relocation incentive, tax exemption, or other Connecticut tax expenditure. If it were a single entity, the combined employment of MPTN government operations, Foxwoods and other tribal enterprises, MPTN’s 25% direct payment of $120 million in Connecticut and the other businesses located at Foxwoods would rank it fiscal year 2018 would just about cover the cost of Connecticut’s eighth in Connecticut above Wal-Mart and below the University business exemption of sales taxes for machinery used in manuof Connecticut. As a stand-alone proposition, Foxwoods Resort facturing, $101 million, and its research and experimentation Casino ranks thirteenth, above Trinity Health of New England tax credit, $21 million. and below Mohegan Sun and The Hartford. Since more than three-quarters of Foxwoods’ gaming dollars Seventy-seven percent of the Tribe’s payroll is paid in in 2017 came from out-of-state patrons, taxpayers and advoConnecticut, most of it close to Mashantucket, CT. More than cates of Connecticut economic growth can rest assured that the four-fifths of this Connecticut payroll was paid in the state’s Tribe’s economic impact is overwhelmingly a net contribution. poorest zip codes. Taylor 2019 i ii Mashanfuckef Pequot Economic Impact Contents Findings in Brief...................................................................................................................i I. Tribal Self-Government and Economic Impact.....................................................................1 A. The Modern Reinvigoration of Mashantucket Pequot Self-Government........................... 1 B. Why Sovereignty Matters............................................................................................3 C. Contemporary Mashantucket Pequot Self-Government..................................................4 D. Mashantucket Pequot Structure and Economic Impact....................................................7 II. The Tribal Economy and Its Impacts on Connecticut........................................................... 9 A. Overview of Tribal Government and Enterprise.............................................................9 B. Interstate Trade in Gambling Leisure and Related Services............................................ 12 C. Direct Impacts: Employment & Purchasing.................................................................. 13 D. Multiplier Impacts in Connecticut.............................................................................. 16 E. Connecticut Fiscal Impacts........................................................................................ 19 III. The Tribe Produces Net Economic Benefits for Connecticut............................................. 20 About the Author & Appendix............................................................................................21 References....................................................................................................................... 22 Taylor 2019 iii Fig. 1 Lands of the Mashantucket Pequot Tribal Nation 2018 NORTH STONINGTON Avery Pond Lake of Isles PRESTON Land Claim Settlement Area Cedar Pond LEDYARD land lost by 1666 Great Cedar Swamp Maher Pond lost by 1855 Stanley Pond ~989 acres Lantern Hill Pond post-1855 ~179 acres lost by 1737 lost by 1801 ~654 acres lost by 1721 Silex Pond Long Pond 0 1 mi Trust Lands Fee Lands Historic Lands (location approximate) Note: Presentation here of historic Mashantucket Pequot boundaries does not imply MPTN acceptance and/or endorsement of the boundaries or the processes that produced them. (McBride, 1990) iv Mashantucket Pequot Economic Impact I. Tribal Self-Government and Economic Impact Though the Mashantucket Pequot Tribal Nation (MPTN) is today situated in a matrix of governments structured under US federalism, the self-governing Algonquian community pre-existed Connecticut and its sub-governments.1 The Mashantucket Pequot Tribe’s enduring nature as a government, its continuous occupancy of a 350-year old reservation, and recognition of those facts in law determine the economic character of its effects on Connecticut today, the subject of this report. A. The Modern Reinvigoration of Mashantucket Pequot Self-Government At the time of English arrivals at Plymouth four centuries ago, several thousand Pequots occupied a 250-square-mile area between the Thames and Pawcatuck Rivers in what is now southeastern Connecticut. The Pequot War (1636-1638), subsequent enslavement, and European diseases decimated the Pequot population. Though land was reserved in 1666 for the Pequots—the first such reservation in North America— settlers encroached such that by 1721 it had been reduced by 1,000–1,500 acres. The colonial General Assembly further reduced it to a 989-acre parcel in 1761. In 1855 Connecticut auctioned all but 204 of the remaining acres (McBride, 1990, pp. 106-107). Encroachment not only reduced the quantity of the Mashantucket Pequots’ essential asset, but also concentrated the holdings in the Great Cedar Swamp, thereby contributing to economic migration away from Mashantucket (Fig. 1). After centuries of neglect and/or hostility from the settler population, in the 1970’s Mashantucket Pequots began to formally organize to address a critical housing shortage, to assert land claims, to develop economic opportunities, and to bring people back to the reservation. These efforts paralleled nationwide contemporary Native efforts to reassert self-governing rights and to back those rights with institutions capable of exercising them (Cornell, 1990). In 1974, the Mashantucket Pequot Tribe adopted a corporate charter and bylaws. In 1975, Richard Hayward was elected president under it (Campisi, 1990a, p. 138). In 1977, the Tribe adopted its first Constitution and By-Laws, under which Hayward’s title changed to chairman. In 1976, the Tribe filed suit against neighboring landowners with support from the Native American Rights Fund and the Indian Rights Association. Those landowners’ eventual acknowledgment of the illegitimacy of Connecticut’s nineteenth century auction set the stage for unanimous support from the Connecticut legislature for a federal petition for recognition and land claim settlement. That support spurred the Connecticut congressional delegation to push a bill to address both issues (MPTN, 2018b). 1   I n addition to the Mashantucket Pequot Tribal Nation (MPTN) and the Mohegan Tribe—two of the nation’s 567 federally recognized Indian tribes (BIA, 2018)—and the state-recognized Golden Hill Paugussett, Paucatuck Eastern Pequot, and Schaghticoke tribes, the US Census Bureau counted more than 643 organized, autonomous governing entities, including: municipal governments; town or township governments; school district governments that are independent of town governments; and special district governments, such as development districts, fire, sewer, and other special purpose districts, taxing districts, and various other authorities (US Census, 2013, p. 43). Taylor 2019 1 On October 18, 1983, President Reagan signed the Mashantucket Pequot Indian Claims Settlement Act. The law allowed the Tribe to reclaim acreage improperly sold in 1855. It formally recognized the Tribe—confirming a foundational status under Indian policy. It appropriated $900,000 for re-acquiring land. It extinguished claims to other land, and it allowed the Tribe to place land into trust, that is, into federal ownership on behalf of the Tribe (Campisi, 1990b, pp. 184–185). The Tribe exercised its self-determination and governance long before opening Foxwoods Resort Casino. Examples include: • Developing the first HUD-recognized tribal housing authority for a state-recognized tribe and reservation—an essential ingredient in allowing Pequots to live on the reservation; • Launching several small businesses including a maple syrup processing facility, cordwood and timber sales, a hydroponic greenhouse operation, and a sand and gravel enterprise; • Opening the Mashantucket Pequot High Stakes Bingo Hall; and • Enacting programs and services for health, public works, education, and social services (Wherry, 1990, pp. 215–218). Small though they are in comparison with current operations, these efforts were essential to the recovery of the Mashantucket Pequot community and economy. Writing of the late 1980s, applied anthropologist James Wherry observed, Since this federal enactment, the tribe and its members have experienced great changes...Federal recognition has meant a substantial increase in on-reservation employment, the success of new economic development initiatives, and an increasing population, along with changes in the sociopolitical process and improvements to its infrastructure. Meanwhile, the Tribes landbase has grown from 214 acres in 1983 to its current 1,638 acres. (Wherry, 1990, p. 213) This Mashantucket story corresponds with the broader Native American experience of sovereignty and self-determination. 2 Mashantucket Pequot Economic Impact B. Why Sovereignty Matters The popular imagination wavers between seeing tribal sovereignty as an inconvenient historic relic, on the one hand, and as an entitlement granted by a munificent federal government, on the other. It is neither. Tribal sovereignty is the inherent right of Indigenous tribes to self-govern; a right which predates the United States. Tribal sovereignty is recognized in the US Constitution, for example in the Commerce Clause, which grants Congress the power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes” (Art. 1 §8). Tribal sovereignty is enshrined in treaties such as the Nez Perce Treaty of 1855 under which that tribe still fishes salmon in the Columbia River watershed. Tribal sovereignty is affirmed through legal precedence, such as in the Supreme Court’s decision in California v. Cabazon, which recognizes inherent tribal authority to self-regulate gaming activity on reservations (as Mashantucket Pequot does today). Tribal sovereignty gains practical enforcement through a myriad of Indigenous efforts extending as far back as the 17th century as tribes sought to secure ancestral lands and agricultural rights, and later to displace state and federal overseers and opportunistic land developers. Most importantly, tribal sovereignty works; it does vastly more to improve the fortunes of Indians than all prior aid and policy (Kalt, 2007). Tribal sovereignty gains practical force from myriad Indian efforts since at least the 1970s to displace outsiders in decision-making, whether they are poorly incentivized Bureau of Indian Affairs land overseers or opportunistic ranchers and oilmen. When tribes control forestry, they harvest more of the sustainable timber growth and get higher prices for it (Krepps & Caves, 1994). When tribes control health care, they produce more comprehensive services and generate greater patient satisfaction (Dixon, Shelton, Roubideaux, Mather, & Smith, 1998; Moore, Forbes, & Henderson, 1990). When tribes control antipoverty policies, they witness declines in child psychopathology (Costello, Compton, Keeler, & Angold, 2003). When tribes control economic development, they get greater profitability over the long term and more diversification (Cornell & Kalt, 1992; Jorgensen & Taylor, 2000) When tribes control emergency services, their communities experience faster response times and better police treatment (Cornell, Kalt, Krepps, & Taylor, 1998; Wakeling et al., 2000). In general economic terms, from 1990 to 2000, Indian reservation incomes grew much faster than the national rate, even on reservations that had not opened casinos by the end of that period (Taylor & Kalt, 2005). In the subsequent decade, reservation income growth continued to outpace the national rate, though by smaller relative and absolute amounts due to the recession (Akee & Taylor, 2014). In both decades, Indian income growth took place against a backdrop of low and declining federal spending on programs targeting Indians (Walke, 2000; US Commission on Civil Rights, 2003). Thirty years of research now makes clear that American Indian economic growth arises not from federal or program design, but rather from tribes’ asserting their sovereignty, building institutions to exercise that sovereignty, and designing those institutions in alignment with Indigenous culture (Cornell & Kalt, 2007). American Indian economic history thus mirrors a pattern evident in international contexts, namely that the gains from economic growth vastly exceed the gains from aid Taylor 2019 3 interventions (Pritchett, 2018). Programs and policies targeting individuals, communities, and their problems can be beneficial (especially when compared against regimes of neglect, dispossession, or worse), but they are far surpassed in effect by economic growth. What matters to American Indian economies is that reservation governments perform the functions that foster growth. Much as they could stand to benefit from reservation economic growth, federal, state, and local governments have proven themselves to be uninterested or ineffective in making it happen. C. Contemporary Mashantucket Pequot Self-Government The Constitution and By-Laws of the Tribe gives its citizens (determined by lineal descendancy from Census rolls of 1900 and 1910) the right to vote at the age of 18 (Articles IV & V). At the annual meeting of the Tribe, voters elect representatives of the Tribal Council, which consists of seven members who serve staggered, threeyear terms of office. Tribal Member voters also chose who will occupy the offices of Tribal Council Chairman and Vice-Chairman (Art. VI. §2). The Council then chooses its Secretary and Treasurer or a Secretary-Treasurer (Art. VI. §3, 4). Twelve Standing Committees advise the Tribal Council on matters of policy: Health and Human Services, Economic Development, Housing, Finance, Administrative Support, Education, Community Planning, Parks and Recreation, Judicial, Public Safety, Natural Resources Protection, and Historical and Cultural Preservation. Under the control and oversight of the Tribal Council, a Chief of Staff and various department heads carry out policy, overseeing, directing, and working with the departments, agencies, commissions, court, and entities. The aim is for the government to advance the tribal mission: The Mashantucket Pequot Tribal Nation shall promote spirituality, strong family values, education, social stability, economic independence, and the well-being of Tribal Members, employees, and guests in a healthy and supportive environment. The ultimate goal is to protect and advance the sovereign rights of the Tribal Nation in order to build and preserve a cultural, social, and economic foundation that can never be undermined or destroyed. (MPTN, 2018a) Consistent with its position in a matrix of governments, the MPTN has signed a number of intergovernmental agreements which share the responsibilities and/or benefits of American Indian economic development. First and foremost among them are the agreements with the State of Connecticut governing casino gambling. Under the requirements of the Indian Gaming Regulatory Act of 1988 (IGRA), federally recognized Indian tribes seeking to operate more than traditional Indian games, bingo, or bingo-related games may do so only if they enter into a compact with the state within which the tribe proposes to operate a casino.2 Such compacts must govern the regulation and scope of gaming (25 USC §2710(d)). Except for allowing reimbursement of reasonable regulatory costs, IGRA prohibits states from insisting that tribes pay a tax or otherwise share gaming revenue as a pre-condition for state agreement to a compact (25 USC §2710(d)(4)). 2   W ith limited exception, individual Indians and tribes not recognized by the federal government may not develop gaming operations. 4 Mashantucket Pequot Economic Impact If 7.1 E?s . 21 Taylor 2019 5 After years of litigation, negotiation, and mediation between the Mashantucket Pequot Tribe and Connecticut over the gaming issue, a mediator selected Connecticut’s compact proffer, and the Secretary of Interior issued that compact with slight modifications as gaming procedures on May 31, 1991 (BIA, 1991). Eight and a half months later, Foxwoods Resort Casino opened for business, with a plan to close after two shifts, and it has never closed. Soon after Foxwoods opened, Connecticut and the Mashantucket Pequot Tribe signed a memorandum of understanding (MOU) under which the Tribe agreed to contribute 25% of its gross operating revenues from the operation of “video facsimiles” (slot machines), so long as Connecticut did not enact a law to permit any other person to operate such machines and no other person within the State was lawfully operating such machines. A year later, the Mohegan Tribe entered into a gaming compact with Connecticut, which was essentially identical to the Pequot Compact, and the Tribe and the State amended the MOU to expand the gaming exclusivity to include not only video facsimiles but also commercial casino games and to allow the Mohegan Tribe to enter into an identical MOU. The Mashantucket Pequot and Mohegan Tribes have made payments to the State under the MOU’s over the past 25 years amounting to nearly $8 billion (Fig. 2).3 Fig. 2 Tribal Contributions to Connecticut and Out-of-State Competition millions of dollars monthly thousands of gaming positions* $25M 25K Mohegan $3.7B since inception out-of-state positions near Connecticut** 20 15 15 10 10 Mashantucket Pequot $4.2B since inception 0 1995 2000 recession recession 5 2005 2010 CT FY2018 = $120M 20 2015 5 0 2020 *Positions = slot machines + 7 × (table games + poker tables). **In Massachusetts, Rhode Island, and southeast New York for selected dates up to October 10, 2018. Darker line indicates trailing 12-month moving average. (FRED, 2018; Casino City, 2018; CT DCP, 2018) Other intergovernmental agreements smooth the provision of public services at the boundaries between tribal and non-Indian jurisdiction. The Connecticut Commissioner of the Department of Emergency Services and Public Protection and MPTN signed an agreement to recognize the Mashantucket Pequot police force as a law enforcement unit and MPTN police officers as peace officers under State law, enabling the tribal 3  R obert Gips, longtime legal counsel to the Mashantucket Pequot Tribal Nation, has written a more detailed history of the compact and MOU, from which this narrative is condensed (Gips, 2018). 6 Mashantucket Pequot Economic Impact police officers to arrest non-Indians on the Mashantucket Pequot Reservation (August 1, 2014). The Connecticut Department of Motor Vehicles and the Tribe have an agreement governing the registration and tax exemption of vehicles owned by the Tribe, its members or their spouses and garaged on the reservation (pursuant to Connecticut law (CGS §12-81(71)). The Tribe has mutual aid plans with local municipalities; for example, Ledyard Fire Company District No. 1 and the Mashantucket Pequot Tribe have an agreement that articulates how the two will participate in multi-alarm incidents like structure and brush fires, hazardous material emergencies, and motor vehicle accidents (Ledyard Fire Co. Dist. 1, 2002). D. Mashantucket Pequot Structure and Economic Impact The economic geography of casino competition in southern New England determines a great deal of the economic impact of Foxwoods, particularly its position as a destination for patrons from adjacent states (as explained below). A second major driver of economic impact is Foxwoods’ nature as a government-owned enterprise. Intergovernmental agreement (the MOU) produces a direct benefit to the Connecticut treasury—25% of top-line revenues on slots. Those funds arrive in the Connecticut Treasury virtually without tax compliance risk, enforcement cost, or economic inefficiency. IGRA’s general requirement that casinos must be owned and controlled by tribal governments (i.e., not privately held) means that what would otherwise be casino profit is instead 100% government revenue.4 In contrast to Las Vegas or Atlantic City casino profits, which would be dispersed wherever in the world company owners reside, the Mashantucket Pequot Tribe’s gaming revenue is spent locally on government programs and services that benefit Mashantucket Pequot citizens, citizens of the state and region, and patrons. As a territory-based government, the Mashantucket Pequot Tribe cannot and will not move its operations to a more economically favorable jurisdiction. A third characteristic of the Tribe concerns the necessity of trade with the economies around it. Virtually no reservation economy can supply all the carpeting, playing cards, computers, management consulting services, natural gas, or police cruisers that modern tribal governments require. The Mashantucket Pequot Tribe, like so many others, must turn to off-reservation suppliers in Connecticut and elsewhere, ensuring that Foxwoods’ economic impact extends quickly and thoroughly across its reservation border. 4  Profit is here meant as economic profit (rent in the jargon of economics), i.e., the residual accruing to owners after all costs—including the costs of capital—are paid. Taylor 2019 7 8 Mashanfuckef Pequot Economic Impact II. The Tribal Economy and Its Impacts on Connecticut While the Mashantucket Pequot Tribal Nation occupies the oldest Indian reservation in the United States, its contemporary leaders supervise a modern and complex economy. This section explains the character and volume of Mashantucket Pequot economic activity and its economic effects on Connecticut. A. Overview of Tribal Government and Enterprise The Tribe’s departments and programs variously adjudicate disputes, pave roads, treat the sick, preserve artifacts, inspect commercial kitchens, ensure the integrity of gaming operations, extinguish fires, treat wastewater, maintain low-income housing, keep the peace, and more. The physical infrastructure visible in orange in Fig. 1 speaks to the multimillion-dollar capital investments necessary for Mashantucket Pequot’s governmental work (i.e., a wastewater treatment plant, a utilities plant, a community center, a child day care center, a police station, a public works department, a post office, and a museum). In 2017, Mashantucket Pequot employed 544 people to do the work of its government, including 24 police officers, 36 surveillance officers, and 15 firefighters. These people and programs did substantial work in 2017. The Mashantucket Pequot Tribal Police responded to over 10,000 calls and made more than 450 arrests consistent with their powers under tribal law, federal law and the memorandum of agreement with Connecticut. The Mashantucket Pequot Fire & Emergency Department responded to over 900 emergency calls (outside of Foxwoods), while the Foxwoods Emergency Medical Services responds to an average of 3,500 calls annually at the resort. The Tribal Historic Preservation Office made determinations on 147 federal undertakings under the National Historic Preservation Act. The Tribe’s Land Use Department issued approximately 800 permits related to land use, natural resources protection, and building code enforcement. The Tribe’s food safety department conducted 600 routine inspections of food preparation facilities, trained staff in food safety procedures, and responded to employee complaints. The Tribal Occupational Safety Administration reconciled more than 30 matters related to occupational health and safety. The Inspection Division of the Mashantucket Pequot Tribal Gaming Commission monitors gaming regulatory compliance with inspectors on duty 24 hours a day, 365 days a year. These and many other public services benefit the general public and tribal members. The Mashantucket Pequot Tribe’s government-owned enterprises (and their customers) provide the demand for the lion’s share of the governments’ services. They also provide the bulk of the government’s revenue. Tribal expenditures of federal grants and grant-related contracts (including Connecticut pass-throughs of federal funds) represented only 6.7 percent of total FY2017 government expenditures. Connecticut government grants to MPTN that were not pass-throughs of federal funds were nonexistent. Taylor 2019 9 Fig. 3 Casinos Characteristics in Eastern New York & Southern New England October 2018 table games poker tables 4,400 5,072 249 307 94 43 3,600 0 344,000 350,000 150,000 225,000 2,224 1,600 42 45 7,558 8,400 3,000 1,250 75 0 0 0 0 0 125,000 0 0 0 250 0 13 9 3,000 604 5,000 1,000 4,400 0 0 0 0 0 0 0 0 0 120,000 0 330,000 0 0 70,000 0 228 0 5 1 3 1,200 340 0 1,000 4,200 32 113 0 0 0 0 33,600 300,000 0 29,000 84 0 7 9 500 1,400 slots Connecticut Foxwoods Resort Casino Mohegan Sun Massachusetts MGM Springfield Plainridge Park Casino New York Empire City at Yonkers Raceway Jake’s 58 Hotel & Casino Resorts World Casino NYC Rhode Island Tiverton Casino Hotel Twin River Casino bingo seats casino sq. ft. convention sq. ft. hotel rooms restaurants employees Note: Does not include bingo-only halls, race-only tracks, off-track betting facilities, jai-alai frontons, or cruise ships. (Casino City, 2018) Fig. 4 Gaming Competition in Southern New England and Southeastern New York gaming positions as of October 2018 I-90 Rivers Schenectady 1,724 Vermont New Hampshire I-95 Massachusetts New York Encore Boston Harbor 4,176 Twin River 4,991 Plainridge Park 1,250 I-91 MGM Springfield 3,525 I-90 I-95 MMCT East Windsor 2,700 Resorts World Catskills 3,333 Connecticut I-84 First Light 2,320 Rhode Island I-84 I-84 I-91 Tiverton Foxwoods 1,224 6,801 I-95 Population per sq. mi. 0 to 1 Mohegan Sun 7,522 Resorts World NYV 4,400 1 to 10 10 to 100 100 to 1,000 Jake’s 58 1,000 1,000 to 10,000 0 50 mi over 10,000 Note: Circles are scaled by the indicated number of gaming positions, where positions = slot machines plus seven times the sum of poker tables and table games. Does not include bingo-only halls, race-only tracks, off-track betting facilities, jai-alai frontons, or cruise ships. Encore Boston Harbor under construction; First Light and MMCT East Windsor planned. (US Census, 2018; Casino City, 2018) 10 Mashantucket Pequot Economic Impact The oldest and largest of the tribally owned enterprises is Foxwoods Resort Casino, whose predecessor, Mashantucket Pequot High-Stakes Bingo, opened in 1986. Foxwoods itself opened on February 15, 1992 and celebrated its 25th anniversary in 2017. At various times and by various measures, Foxwoods has been the largest casino in the North America, the western hemisphere, and the world. Today, it has the largest bingo facility in the world by a wide margin. Even holding aside bingo, it currently ranks #3 in the world by number of gaming positions, according to one industry guide (Casino City, 2018).5 Notwithstanding recent casino development in the region, it and Mohegan Sun still dominate New England and southeastern New York (Figs. 3 & 4), and its number of hotel rooms ranks first in the region.6 Consistent with the evolution of modern casinos, Foxwoods is an integrated resort, offering vastly more than just a night playing the slots, and is currently ranked the number one casino outside of Las Vegas by USA Today. To attract and accommodate customers from beyond the local population, the Tribe has invested more than $2.7 billion in Foxwoods Resort Casino since inception. The resort’s 2,224 hotel rooms, suites, and villas span a range of quality up to AAA’s Four Diamond level. Its 42 restaurants, bars, and lounges run the gamut from fast food like Einstein’s Bagels to celebrity-chef restaurants, such as Guy Fieri’s Foxwoods Kitchen. Other attractions include two spas, five pools, a zip line, a go-kart track, and a luxury bowling alley. Two theaters attract internationally recognized headliners like Jerry Seinfeld and Alicia Keys. Five ballrooms make it possible to host large conferences and events. The adjoining Tanger Outlets Mall houses more than 120 premium-brand retail stores ranging from Coach and Brooks Brothers to Old Navy and Kate Spade. Additional tribal enterprises lie outside the main resort complex. At the southeastern entrance from Route 2, the Pequot Outpost contains a convenience store, Mobil gas station, and Burger King restaurant. Nearby, the Two Trees Inn offers a place to stay overnight at some distance from the noise of the casino. To the northeast of Foxwoods is the 900-acre Lake of Isles Golf Course, rated among Golf magazine’s 100-best public courses in the country and GolfWeek’s top rated Connecticut course. Twenty minutes’ drive to the east of Foxwoods, is The Spa at Norwich Inn.   Gaming positions is a generally used tool for assessing casino capacity and consists of the number of slot machines plus seven times the sum of table games and poker tables. 5 6   The data discussed in this paragraph and cited in Figs. 3 & 4 is produced by a directory company, Casino City (2018), which periodically surveys casinos’ management about capacity. While the data about facilities may occasionally be of different vintages and accuracy, whatever errors exist in a particular snapshot are not likely to overturn the general observation that Foxwoods is among the largest facilities in the world. Taylor 2019 11 The Mashantucket Pequot Museum and Research Center—a non-profit educational institution that seeks to further knowledge and understanding of Pequot history and culture and of Indigenous cultures throughout North America—receives approximately 35,000 visitors annually. The Pequot Pharmaceutical Network (PRxN) provides tribal clients and commercial employer groups with pharmacy benefits management (PBM), network pharmacy access, and a state-of-the-art mail-order fulfillment. Pequot Health Care (PHC) is a managed care company owned by the MPTN. PHC provides health plan administration, claims adjudication, and PBM services to American Indian tribes, Native-owned businesses, and commercial business groups that self-fund their employee health benefit plans. The mission of PHC is to provide innovative health benefit administration and pharmaceutical services to help control health care costs without sacrificing employee satisfaction and wellness. None of the above would be possible without the governing powers of the Mashantucket Pequot Tribal Nation and the institutional and physical infrastructure it has built. B. Interstate Trade in Gambling Leisure and Related Services Foxwoods and the Tribe’s allied businesses attract more than 12.8 million visits per year—an average of 35,000 visits daily. Over its lifetime, Foxwoods has hosted 300 million visits, the rough equivalent of every living man, woman, and child in the US today. More than three-quarters of the gambling expenditures made in 2017 (77%) came from out-of-state visitors,7 and as gaming expenditures go, so go expenditures on shows, stays, meals, shopping, and more. First and foremost, Foxwoods is a net exporter of leisure services.8 The spending at Mashantucket cascades quickly into the Connecticut economy as schematically portrayed in Fig. 5. Tribal enterprises transfer net income to their owner, the Mashantucket Pequot Tribal Nation. Both enterprises and government operations hire workers and purchase goods and services, the vast majority of which come from outside the reservation. Purchasing dollars exert demand on businesses throughout Connecticut, and payroll supports families in all 169 Connecticut municipalities. Both circulate in the Connecticut economy over and over until dissipated by “economic leakages” in the form of payments to in-commuters’ households, savings, and imports. As they circulate, the purchasing and payroll dollars, in turn, yield sales, excise, and corporate income tax revenues on the one hand, and social insurance and personal income tax revenues on the other. The next subsections describe the flows in turn.   T he out-of-state proportion is calculated from the zip code distribution of theoretical win tracked by Foxwoods’ player loyalty card. Not all player revenue is associated with a player loyalty card, but there is no reason to suspect that the geography of total revenue is so divergent from player loyalty revenue as to overturn the conclusion that MPGE is a net exporter. 7 8   T hough the out-of-state customers come into Connecticut, the leisure services are considered exports in the counterintuitive intuitive jargon of trade in services. The converse, import substitution, occurs when Foxwoods helps retain Connecticut residents’ discretionary spending in-state, i.e., provides a convenient in-state substitute for gambling leisure imports from, e.g., Atlantic City, NJ. 12 Mashantucket Pequot Economic Impact C. Direct Impacts: Employment & Purchasing At the end of 2017, 9,702 people worked on the Mashantucket Pequot Reservation. Tribal government operations employed 544, as noted above. In addition, Foxwoods and other tribal enterprises employed 6,772. An additional 2,386 people worked in non-tribal retail stores and restaurants, mostly in Tanger Outlets. Collectively, employees of the Tribe and resort earned more than $180 million in regular and overtime earnings plus $144 million in benefits (the bulk of which were medical and dental insurance, paid leave, and 401(k) contributions) for a tribe-wide total employee compensation of $324 million. The Tribe withheld $31 million in federal income taxes, $8.8 million in state income taxes, and $40 million in Social Security and Medicare taxes. Other businesses at Foxwoods, including stores and restaurants paid compensation and withheld taxes in addition to these amounts. Alongside the Tribe’s direct compensation were a number of ancillary worker benefits. In 2017 employee benefits funded by the Tribe included a wellness incentive, a disease management program, life and long-term disability insurance, a tuition reimbursement program for job-related classes, and an employee assistance program (EAP). The EAP provides free, short-term counseling to help employees and their dependents manage personal challenges, including childcare and eldercare arrangements, financial and legal services, and identity theft recovery. Employees and MPTN jointly shared the cost of additional benefit options, including a gym membership; prescription, vision, and dental programs; a 401(k)-retirement plan; and childcare. On-the-job investments in workers include a world-class service training program called “Five Star Service Standards,” which equips employees with customer service skills. Fig. 5 im p or ts Economic & Fiscal Flows of the Mashantucket Pequot Tribal Nation direct impact tax es Connecticut workers’ households ta x es* muters in-com me rs cu sto insta te s ter mu com in- sav ing s federal, state, and local governments savings ta x es* s at sto res 25% of slots revenue lation u g e rr nt fo e me re i m b u r s payroll customer demand Connecticut economic impact t a xe ing chas pur gaming revenue purchasing Mashantucket Pequot Settlement Lands hasing & purc roll pay out-of-state customers Connecticut firms ** Mashantucket Pequot government *Social insurance and personal income taxes. **Sales, excise, and corporate income taxes. Taylor 2019 13 Fig. 6 Fig. 7 Top Fifteen Employers in Connecticut, 2017 Tribal Commercial Employment and Connecticut Gross State Product in-state employees only State of Connecticut Yale New Haven Health System Hartford HealthCare Yale University United Technologies Corp. General Dynamics Electric Boat University of Connecticut Mashantucket Pequot Reservation (incl. Foxwoods) Walmart Stores Inc. Sikorsky, A Lockheed Martin Company The Travelers Cos. Inc. The Hartford Mohegan Sun Foxwoods Resort Casino Trinity Health Of New England Aetna Inc. number of employees billions of 2017 dollars $300 14,000 225 10,500 gross state product 150 7,000 Mashantucket Pequot commerical entities 75 3,500 0 1993 1998 (FRED, 2018) Hartford Business Journal data for Foxwoods Resort Casino (6,500) updated with actual MPTN data. “Mashantucket Pequot Reservation” includes government and third-party employers. (Hartford Business Journal, 2017) Fig. 8 Payroll of the Mashantucket Pequot Tribal Nation Concentrates in Southeast Connecticut percent of $180M FY2017 payroll by zip code Mashantucket Pequot < 0.5% 0.5–1% 1–5% 14 Mashantucket Pequot Economic Impact 5–10% 10-20% recession 8 9 10 11 11 13 14 15 57,771 21,867 18,425 16,184 16,000 11,430 10,019 9,702 8,974 7,730 7,400 6,800 6,800 6,772 6,491 5,618 recession #1 2 3 4 5 6 7 2003 2008 2013 0 2018 These numbers mean that the Mashantucket Pequot Reservation contains one of the largest concentrations of employment in the state. If it were a single entity, the combined employment of MPTN government operations, Foxwoods and other tribal enterprises, and the other businesses located at Foxwoods would rank it eighth in Connecticut, above Walmart and below the University of Connecticut. As a standalone proposition, Foxwoods Resort Casino ranks thirteenth, above Trinity Health of New England and below Mohegan Sun and The Hartford (Fig. 6). The Tribe still ranks highly as a Connecticut employer despite experiencing a steady decline in employment in recent years. While the Connecticut economy has experienced net growth over the last two decades (notwithstanding the Great Recession), tribal employment has declined steadily over the period (Fig. 7), consistent with competition in neighboring states (as indicated in Fig. 2). Fig. 9 MPTN’s Payroll Goes to Lower Income Areas cumulative percentage of Connecticut payroll in 2017 100% 83% Ledyard, Gales Ferry 7% 75 Groton 8% Jewett City, Griswold, Lisbon 8% 50 25 Norwich 24% median zip code Seventy-seven percent of MPTN’s payroll is paid in Connecticut, most of it close to Mashantucket, CT (Fig. 8). This concentration of payroll is a common consequence of commuting behavior—people live near their work. Fig. 9 shows that in addition, more than four-fifths of the Tribe’s Connecticut payroll was paid in the state’s poorest zip codes. Along the horizontal axis, Connecticut’s zip codes are sorted by per capita income. The vertical axis reports the proportion of the Tribe’s Connecticut payroll paid in a given zip code. The top five payroll-receiving zip codes are identified in darker blue. For example, zip code 06360, Norwich, CT, had a per capita income of $27,919 and the Tribe paid 24% of its Connecticut payroll to workers there. Thus, the geographic location of the Mashantucket Pequot Reservation means that its export-oriented business concentrates payroll not just near its reservation, as expected, but in Connecticut cities and towns in need of economic development. Were Foxwoods’ location determined not by Mashantucket Pequot reservation land use and occupancy since 1666 but rather by twentieth and twenty-first century market forces, the resort would surely be located closer to the New York City metropolitan area and conceivably pay less of its payroll in poor Connecticut zip codes and possibly pay less of it within the state altogether. New London 6% 0 $25,000 $39,748 $75,000 $100,000 zip codes ranked by per capita income (US Census, 2018) Purchasing dollars generally spread more widely than payroll dollars because daily commuters prefer to live close to work but modern, low-cost shipping means goods can be sourced from all over the United States, if not the world. Nonetheless in 2017, 42 percent of the Tribe’s vendor spending went to companies located in New England states and 17 percent went to 897 Connecticut vendors. Large cities like Hartford and Middlebury feature in the top ten Connecticut towns supplying the Tribe, if only because they contain large numbers of companies. Even so, nearby towns like Norwich, North Stonington, Gales Ferry, and New London are also in the top ten Connecticut locales supplying the Mashantucket Pequot Tribe with everything from legal, construction management, and limousine services to office supplies, uniform cleaning, and alcoholic beverages. Taylor 2019 15 D. Multiplier Impacts in Connecticut Returning to Fig. 5, the payroll and purchasing discussed above constitutes the direct economic impact of the Tribe. The firms supplying the Tribe with goods and services, in turn, buy input goods and services, and their suppliers do the same, and so on, until all input requirements are satisfied. For example, Foxwoods contracts a firm to provide uniforms, and that firm uses trucks, gasoline, laundry detergent, water, electricity, and other goods to deliver regularly laundered uniforms to the resort. Economists call this supply-chain demand the indirect economic impact. As firms along the supply chain pay their workers, they add to the payroll dollars paid directly by the Tribe, and both categories of workers’ households, in turn, buy clothing, electricity, washing machines, groceries, children’s school supplies, and gasoline from firms in the economy, creating the induced economic impact. This is not an endless economic cycle. As Fig. 5 indicates, along the way funds depart for government treasuries as federal, state, and local governments levy income, sales, and profit taxes (see next subsection). In similar fashion, other funds cease to contribute to state demand by accumulating in the form of savings and other capital or by departing for out-of-state firms—the suppliers of imports. Fig. 5 and the tables that follow focus the analysis on the impacts on Connecticut. Fig. 10 shows the impacts on Connecticut as estimated by IMPLAN, a standard input-output model originally developed by the US Forest Service and now supported by the IMPLAN Group for a wide variety of private and government analyses nationwide. The estimated direct, indirect, and induced impacts of the 2017 economic activity of the Mashantucket Pequot Reservation totaled $1.1 billion in value added for the Connecticut economy. Relative to output—another common impact metric—value added is the conservative way of presenting the impacts because output repeatedly counts intermediate production (see the Appendix). In the example above, output would count both the detergent supplier’s revenue and the uniform company’s total revenue, including the dollars it paid to the detergent company. Value added counts only what each firm adds to the prior stages of production. Hence, when economists want to measure growth, they use the sum of all value added, which goes by the more widely known designation of gross regional product. The bottom row of Fig. 10 shows that reservation economic activity supported nearly 12,500 jobs in Connecticut in 2017. Fig. 10 Estimated Connecticut Economic Impact, 2017 dollars in millions direct induced total Total Value Added $680 $197 $224 $1,100 Jobs 8,340 1,807 2,321 12,468 (IMPLAN, 2018) 16 Mashantucket Pequot Economic Impact indirect Taylor 2019 17 Fig. 11 Fiscal Benefits of MPTN Economic Activity dollars in thousands sources Connecticut state & local item US federal Total 2017 Direct Impact (actual) intergovernmental agreement payroll contribution of 25% of slots revenue payments for CT gaming regulation social insurance taxes1 income taxes2 property real estate & personal property taxes sales, excise, use, occupancy taxes at tribal enterprises taxes at tenant enterprises $447 $120,128 $1,697 $279 $11,499 $39,582 $42,692 $39,861 $54,191 $2,503 $2,503 $3,189 $6,597 $145,444 $82,762 $3,229 $6,597 $228,206 $171 $18,922 $64,347 $65,695 $64,519 $84,617 subtotal $31,585 $1,323 $52,002 $3,548 $7,925 $141,516 $35,133 $9,248 $193,518 total $197,445 $224,278 $421,723 subtotal Indirect and Induced Impact (estimated per IMPLAN) social insurance taxes1 payroll income taxes2 firms $120,128 $1,249 sales & excise taxes3 corporate income taxes4 $40 Note: Figures above are for 12-month periods but slightly different fiscal/calendar months. 1 State/local: Contributions (employee and employer share) to government social insurance including temporary disability and workers compensation. Federal: Employer and employee share of social security and Medicare taxes, including payments paid by the self-employed. Other social insurance taxes, like unemployment insurance (both the federal and state contributions) are included. 2 State/local: Personal incomes taxes, fines and fees, motor vehicle licenses, personal property taxes, and other taxes and fees (like hunting and fishing licenses, marriage licenses). Federal: Personal income taxes. 3 State/local: Sales and excise taxes, property taxes, rents and royalties, and other fees. MPTN does not pay sales and excise taxes directly to the CT government, although their suppliers do. Federal: Excise taxes, custom duties, and rents and royalties. 4 State/local & federal level: Corporate income taxes. (IMPLAN, 2018) 18 Mashantucket Pequot Economic Impact E. Connecticut Fiscal Impacts Fig. 11 shows the fiscal benefits of the Tribe’s economic activity. The upper portion of the table documents the actual (not estimated) fiscal contributions of the Tribe, its commercial entities, and tenants. In 2017, tribal economic activity yielded $145 million in direct Connecticut state and local government revenue, the lion’s share of which ($120 million) was the Tribe’s contribution of 25% of slot-machine revenue to the State. As agreed with the State, the Tribe also contributed $1.2 million to defray Connecticut’s cost of regulating gaming. The Tribe’s payroll resulted in $94 million in social insurance and income tax revenue at both the state and federal level. Overall, in 2017 Mashantucket Pequot economic activity resulted in more than a quarter-billion dollars in direct taxes to governments ($228 million). Indirect and induced economic activity added an estimated $52 million to Connecticut’s total, as indicated in the lower portion of Fig. 11. The combined actual direct and estimated indirect and induced fiscal consequences were $197 million for Connecticut and $224 million for the federal government, for a grand total of $422 million. The intergovernmental agreement established in 1993 between the State of Connecticut and the Mashantucket Pequot Tribe is much like a business partnership between two parties, through which both profit considerably. For the consideration of statewide gaming exclusivity, Connecticut reaped $120 million in 25% slot revenue contribution in 2017. Meantime, Connecticut’s role as collector of its own sales, income, and other taxes remains undiminished; almost two-thirds more ($77 million) entered State coffers through direct, indirect, and induced taxes on economic activity spurred by the Tribe’s policies and investments. Virtually all of the funds are available to Connecticut to expend on government programs and services, including schools, universities, roads, courts, parks, prisons, and its other government programs. These flows persist over time and are relatively large. Since the Tribe began paying the 25% slots revenue contribution twenty-five years ago, it has paid $4.2 billion to Connecticut (CT DCP, 2018). Recent interstate competitive pressure has depressed the contributions. Nonetheless, the combined Mashantucket Pequot and Mohegan contributions remain substantial; for context, Connecticut’s realized revenue from the two Tribes in the fiscal year ended June 30, 2018 ($273 million) equates to almost a third the size of the $921 million that Connecticut realized in corporation tax revenue that year (Fig. 12). More importantly, MPTN’s economic and fiscal benefits to Connecticut never required any tax abatement, relocation incentive, tax exemption, or other Connecticut tax expenditure. MPTN’s 25% contribution of $120 million in Connecticut fiscal 2018 would just about cover the cost of Connecticut’s business exemption of sales taxes for machinery used in manufacturing, $101 million, and its research and experimentation tax credit, $21 million (Murphy, 2018, pp. 50, 124). Fig. 12 Mashantucket Pequot and Mohegan Tribes’ 25% Slot Contributions vs. CT Corporation Taxes realized revenue in million$ 921 $750M 500 273 250 0 Indian Gaming Payments Corporations Taxes FY2018 (Lembo, 2018, p.24.). Taylor 2019 19 III. The Tribe Produces Net Economic Benefits for Connecticut The Mashantucket Pequot Tribal Nation has particular, historic significance to the State of Connecticut and the United States. Its 1666 reservation is the longest continually occupied tribal land allotment in the US. The Tribe’s bingo hall is one of the first Indian bingo operations in the US, and is the largest today. Overall, Foxwoods Resort Casino ranks among the top facilities in the world. In 2017, 9,702 people worked on the reservation, ranking it among the top employers in Connecticut. It has contributed vast sums to the Connecticut treasury, both directly and indirectly. In 2017, the Tribe was responsible for at least $1.1 billion of gross state product. But does its impact yield a net economic benefit to Connecticut or does it just move money around the state? Foxwood’s patrons have other options for spending their disposable income, and a hypothetical disappearance of the resort might result in a certain amount of spending elsewhere in the Connecticut economy. For example, rather than attending Foxwoods or the Spa at Norwich Inn, some patrons might divert their leisure spending to other in-state movie theaters, inns, sports arenas, and the like. However, since more than three-quarters of Foxwoods’ gaming dollars in 2017 came from out-of-state patrons, such substitution effects will be small relative to the total benefits. In other words, taxpayers and advocates of Connecticut economic growth can rest assured that MPTN’s economic impact is overwhelmingly a net contribution. This cannot be said of all of Connecticut’s top employers. Moreover, because Mashantucket Pequot payroll concentrates nearby, and nearby towns have incomes below the median for Connecticut, the Tribes’ attraction of out-of-state visitors translates into jobs where they are needed. Since 83% of MPTN’s payroll goes to zip codes below the median, the Tribe directly improves geographic disparities in the Connecticut income distribution. In the future, as gaming competition grows in adjacent states, Foxwoods will produce the additional economic benefit of giving Connecticut gamblers a reason to gamble in state. Researchers working for Connecticut’s Division of Special Revenue two decades ago estimated that 40 percent of Connecticut residents’ spending at Foxwoods was revenue that would otherwise have gone to out-of-state gambling and entertainment (WEFA Group, ICR Survey Research Group, Lesieur, & Thompson, 1997, pp. 2-4–2-5). The full force of interstate competition has yet to be experienced in southern New England. The opening of MGM’s Springfield facility is evident on the right end of the orange line in Fig. 2, but the full effects have probably not registered in Mashantucket Pequot and Mohegan contributions to Connecticut. And more out-of-state openings are expected in Boston and southern Massachusetts as indicated in Fig. 4. Thus, Foxwood’s capacity to remain competitive and enterain Connecticut residents in Connecticut is certainly growing in importance. The continuation and enlargement of amicable intergovernmental relations will help to ensure that the Mashantucket Pequot Tribal Nation remains a robust contributor to Connecticut’s economy. 20 Mashantucket Pequot Economic Impact About the Author Jonathan Taylor is an economist with expertise in natural resources, gaming, and American Indian development. He provides counsel to tribes and bands in the United States and Canada consisting of public policy analysis, strategic advice, and economic research. He has given expert testimony in litigation and other public proceedings. Taylor has assessed economic impacts of tribal enterprises (including of casinos), evaluated tribal tax regimes, assisted in tribal institutional reform, provided public policy analysis and negotiation support for resource development, valued non-market attributes of natural resources, and educated tribal executives. Taylor is President of the Taylor Policy Group, an economics and public policy consultancy, a Research Affiliate at the Harvard Project on American Indian Economic Development at the Kennedy School of Government, and a Senior Policy Associate at the Native Nations Institute, Udall Center for Studies in Public Policy, University of Arizona, Tucson. He holds a Master’s in Public Policy from Harvard University (1992) and a Bachelor of Arts in Politics from Princeton University (1986). A current CV is available at taylorpolicy.com. Appendix Several modeling approaches improve the precision of the impact estimates and introduce conservatism. Tribal enterprise impacts were modeled to reflect their government-owned nature; top-line enterprise revenue (demand) was combined with a modeling assumption to zero out proprietor income. In contrast to run-of-the-mill IMPLAN studies, this approach eliminates the risk of overstating proprietor income (a segment of value added) when modeling a government-owned enterprise and its government. In addition, at the recommendation of the IMPLAN Group, top-line revenues were margined to eliminate the pass-through of the costs of goods sold (COGS) in retail businesses. Tribal government was modeled using a local government institutional spending pattern. In both government-owned enterprise and administrative government modeling, tribal data on total employee compensation (i.e., inclusive of employer contributions to social insurance) were introduced to further calibrate the model to actual operations. Care in reporting accompanies conservatism in modeling. Many impact studies report output numbers instead of value added, but output double-counts (and worse). For example, the original value of iron that becomes ore at a mine, steel at a smelter, stamped sheet metal at a mill, a radio housing at an electronics firm, a car stereo at an auto plant, and a car sale at a dealership would be counted six times over in output. Yes, each firm received revenue to cover the costs of its inputs—in turn, the revenues of its input suppliers—but the economy is not as large as all those firms’ revenues. Because it is not appropriate to count the iron ore six times, economists measure gross regional, state, or national product—the sum of all value added—to track growth and recession, not the measure of all firms’ revenues (output). Not only is value added unexaggerated by double-counting, it does not vary with vertical integration or segmentation. By contrast, output would shrink in the iron ore example above if the smelter and sheet metal firms merged, despite the economy not shrinking by such a merger. Taylor 2019 21 References Akee, R. K. Q., & Taylor, J. B. (2014). Social and Economic Change on American Indian Reservations: A Databook of the US Censuses and American Community Survey, 1990–2010. Sarasota, FL: Taylor Policy Group, Inc. Costello, E. J., Compton, S. N., Keeler, G., & Angold, A. (2003). Relationships between poverty and psychopathology: A natural experiment. Journal of the American Medical Association, 290(15), 2023-2029. BIA. (2018). Indian entities recognized and eligible to receive services from the United States Bureau of Indian Affairs. Federal Register, 83(20), 4235-4241. CT DCP. (2018). Connecticut Department of Consumer Protection, Gaming Revenue and Statistics. Retrieved October 10, 2018 from https://portal.ct.gov/DCP/Gaming-Division/Gaming/ Gaming-Revenue-and-Statistics BIA. (1991). Notice of final Mashantucket Pequot gaming procedures. Federal Register, 56(105), 24996-24998. Campisi, J. (1990a). The emergence of the Mashantucket Pequot Tribe, 1637–1975. In L. M. Hauptman & J. D. Wherry (Eds.), The Pequots in Southern New England: The Fall and Rise of an American Indian Nation (The Civilization of the American Indian Series) (pp. 117-140). Norman, OK: University of Oklahoma Press. Campisi, J. (1990b). The New England tribes and their quest for justice. In L. M. Hauptman & J. D. Wherry (Eds.), The Pequots in Southern New England: The Fall and Rise of an American Indian Nation (The Civilization of the American Indian Series) (pp. 179-193). Norman, OK: University of Oklahoma Press. Dixon, M., Shelton, B. L., Roubideaux, Y., Mather, D., & Smith, C. M. (1998). Tribal Perspectives on Indian Self-Determination and SelfGovernance in Health Care Management. Denver, CO: National Indian Health Board. FRED. (2018). Federal Reserve Economic Data. Retrieved Nov 16, 2018 from https://fred.stlouisfed.org/ Gips, R. (2018). Testimony of Robert Gips before the Government Administration and Elections Committee, Connecticut General Assembly, March 22, 2018. Hartford Business Journal. (2017). Connecticut’s largest employers. Hartford Business Journal. Casino City. (2018). Gaming Directory. Retrieved October 10, 2018 from http://www.gamingdirectory.com/ IMPLAN. (2018). Economic Impact Analysis for Planning. Retrieved September 21, 2018 from http://www.implan.com/ Cornell, S. E. (1990). The Return of the Native: American Indian Political Resurgence. New York, NY: Oxford University Press. Jorgensen, M. R., & Taylor, J. B. (2000). What determines Indian economic success? Evidence from tribal and individual Indian enterprises. Red Ink, 8(2), 45-51. Cornell, S. E., & Kalt, J. P. (1992). Reloading the dice: Improving the chances for economic development on American Indian reservations. In S. E. Cornell & J. P. Kalt (Eds.), What Can Tribes Do? Strategies and Institutions in American Indian Economic Development (pp. 2-51). Los Angeles, CA: American Indian Studies Center, University of California, Los Angeles. Cornell, S. E., & Kalt, J. P. (2007). Two approaches to the development of Native nations: One works, the other doesn’t. In M. R. Jorgensen (Ed.), Rebuilding Native Nations: Strategies for Governance and Development (1st Edition ed., pp. 3-33). Tucson, AZ: University of Arizona Press. Cornell, S. E., Kalt, J. P., Krepps, M. B., & Taylor, J. B. (1998). American Indian Gaming Policy and Its Socio-Economic Effects: A Report to the National Gambling Impact Study Commission. Cambridge, MA: The Economics Resource Group, Inc. 22 Mashantucket Pequot Economic Impact Kalt, J. P. (2007). The State of America’s Native Nations: Testimony of Joseph P. Kalt before the US House of Representatives, Committee on Appropriations, Subcommittee on Interior, Environment, and Related Agencies, March 13, 2007. Krepps, M. B., & Caves, R. E. (1994). Bureaucrats and Indians: Principal-agent relations and efficient management of tribal forest resources. Journal of Economic Behavior & Organization, 24(2), 133-151. Ledyard Fire Co. Dist. 1. (2002). Policies and Operating Guidelines, Mutual Aid Plans. Lembo, K. (2018). State of Connecticut, Office of the State Comptroller, Annual Report, FY2018. Retrieved Nov 20, 2018 from https://www.osc.ct.gov/2018annual/pdf/Annual2018.pdf McBride, K. A. (1990). The Historical Archaeology of the Mashantucket Pequots, 1637–1900: A Preliminary Analysis. In L. M. Hauptman & J. D. Wherry (Eds.), The Pequots in Southern New England: The Fall and Rise of an American Indian Nation (The Civilization of the American Indian Series) (pp. 96-116). Norman, OK: University of Oklahoma Press. Moore, M. A., Forbes, H., & Henderson, L. (1990). The provision of primary health care services under band control: The Montreal Lake case. Native Studies Review, 6(1), 153-164. MPTN. (2018a). The Mashantucket (Western) Pequot Tribal Nation: Mashantucket Pequot Tribal Government. Retrieved Dec 3, 2018 from https://www.mptn-nsn.gov/government.aspx MPTN. (2018b). The Mashantucket (Western) Pequot Tribal Nation: Tribal History. Retrieved Dec 3, 2018 from https://www.mptn-nsn. gov/tribalhistory.aspx Murphy, M. (2018). Connecticut Tax Expenditure Report. Hartford, CT: Office of Fiscal Analysis, Connecticut General Assembly. Pritchett, L. (2018). Alleviating Global Poverty: Labor Mobility, Direct Assistance, and Economic Growth. Retrieved October 17, 2018 from https://www.cgdev.org/sites/default/files/ alleviating-global-poverty-labor-mobility-direct-assistance-and-economic-growth.pdf Wakeling, S., Jorgensen, M. R., Michaelson, S., Begay, M. A., Hartmann, F. X., & Kalt, J. P. (2000). Policing on American Indian Reservations: A Report to the National Institute of Justice. Cambridge, MA: Malcolm Weiner Center for Social Policy, Harvard Kennedy School. Walke, R. (2000). Indian-related federal spending trends FY 1975–2001 US Congressional Research Service memorandum March 1, 2000. In Report of the Committee on ohe Budget, United States Senate to Accompany S. Con. Res. 101 Together with Additional and Minority Views, Senate Report 106-251 (pp. 199-250). Washington, DC: Congressional Research Service, Library of Congress. WEFA Group, ICR Survey Research Group, Lesieur, H., & Thompson, W. (1997). A Study Concerning the Effects of Legalized Gambling on the Citizens of the State of Connecticut. Eddystone, PA: WEFA Group. Wherry, J. D. (1990). Afterword. In L. M. Hauptman & J. D. Wherry (Eds.), The Pequots in Southern New England: The Fall and Rise of an American Indian Nation (The Civilization of the American Indian Series) (pp. 213-220). Norman, OK: University of Oklahoma Press. Taylor, J. B., & Kalt, J. P. (2005). American Indians on Reservations: A Databook of Socioeconomic Change Between the 1990 and 2000 Censuses. Cambridge, MA: Harvard Project on American Indian Economic Development, Malcolm Wiener Center for Social Policy, John F. Kennedy School of Government, Harvard University. US Census. (2013). 2012 Census of Governments: Individual State Descriptions, 2012 (G12-CG-ISD). Washington, DC: US Department of Commerce, Census Bureau. US Census. (2018). American Community Survey. Retrieved October 22, 2018 from https://www.census.gov/programs-surveys/acs/ news/data-releases.html US Commission on Civil Rights. (2003). A Quiet Crisis: Federal Funding and Unmet Needs in Indian Country. Washington, DC: US Commission on Civil Rights, Office of Civil Rights Evaluation. Taylor 2019 23 .KUWEWL min! asKnuc? . .k 1. . (IN. ?74 1 . tr. .1. umbilo??wlw. 1x. I .Iu . Hui lirxl it? . . s.