Tobacco use: Health vs livelihood?

By Kathy Helms
Diné Bureau

WINDOW ROCK — Is protecting the health of the Navajo people endangering their livelihood? Robert Winter, CEO of the Navajo Nation Gaming Enterprise, says legislation imposing a ban on commercial tobacco use has that potential.

But Herman Shorty of Navajo Office of Environmental Health, a proponent of the tobacco ban, said Wednesday that Navajo laws and regulations are such “that even reasonable persons have to be protected from themselves because of vices, or safety issues that they may not be aware of the need for.”

Representatives from both sides of the issue have presented Navajo Nation President Joe Shirley Jr. with documentation supporting their stances. The Navajo Nation Council approved the tobacco ban July 25, and Shirley’s decision on whether to sign or veto the legislation is expected today, according to presidential spokesman George Hardeen.
Winter and his executive assistant, Phefelia Johnson, made a presentation in executive session Tuesday to the Budget and Finance Committee regarding the legislation, the casino loan agreement, and remedial steps the enterprise is required to take when situations arise.

“Under the loan agreement, we have to comply with various conditions and if there is the potential that one of those conditions can’t be met, we have to come back and redo the loan,” he said.

Though Winter could not go into specifics, he said, “Our examination of the marketplace basically has incontrovertible evidence that tobacco bans have significant effects on the gross returns from various gaming facilities.” This, in turn, could impact the enterprise’s ability to repay the loan it received from the Land Acquisition Trust Fund.

“At a minimum, it will result in about an 18 to 20 percent reduction in gross income. An 18 percent reduction in gross equates to about a 40 percent reduction in employment,” he said.

“What we have to do is we have to comply with our loan agreement, and we have to make sure we can make our payments. In order to do that we have to reduce our costs in light of the reduction, and our bottom line net. The only place to take that from is the number of people you have hired.

“If we were up and operating and this happened, we would have to reduce our work force. And that’s what’s going to happen. We’re in the process now, in case this becomes final law, of hiring less people.”

About 270 employees were expected to be hired for the Fire Rock Navajo Casino being built in Churchrock. That number will have to be reduced to 190 if Shirley signs the legislation and it becomes law.

Budget and Finance Committee Chairman LoRenzo Bates said Wednesday that the Navajo Nation began its gaming initiative about 10 years ago and “went into it understanding all of the components, which included smoking, which included passing legislation to allow liquor.”

“The Nation has also invested a considerable amount of dollars into this. To change that direction and those components with passage of the tobacco ban, it will have a major impact on the revenue stream.

“From all indications, from research done, it will cost the Nation in excess of $20 million annually. It affects any future financing simply because the folks that put the financing together will take into consideration that lost revenue. So it does have a ripple effect,” he said.

OEH’s Shorty said he believes the loss of revenue projection is “kind of a scare tactic. Yes, there is going to be an impact, but I don’t believe that it’s 18 percent. I don’t see the empirical data that would support 18 percent.

“I think its short of the ‘stars falling’ type of concept. Just like the term, ‘If you build it, they will come,’ it will survive,” he said.

During Council debate of the legislation, Bates proposed an amendment to exclude gaming facilities from the tobacco bill, however, the amendment failed and the bill passed 42-27. If Shirley vetoes the bill and the sponsors go for an override, they will need 59 votes.