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Excerpted From: Adam Crepelle, The Tribal per Capita Payment Conundrum: Governance, Culture, and Incentives, 56 Gonzaga Law Review 483 (2020/2021) (337 Footnotes) (Full Document)


AdamCrepelleIndians are often stereotyped as rich from casino revenue, but the reality is far different. In fact, most reservations are more aptly compared to third world countries than a Vegas boulevard. Nonetheless, many tribes provide their citizens with per capita payments, and casinos are the primary source of the funds. Per capita payments are often small, roughly $1,000 a year; however, some tribes make per capita payments in excess of $100,000 per year. While recipients undoubtedly welcome their per capita checks, per capita payments raise serious questions for tribal governments and cultures.

Although they can be brandished for good, per capita payments can have negative effects. Per capita payments tend to expand rather than contract; consequently, per capita payments can consume a significant portion of tribal budgets. No tribal official wants to reduce per capita--especially during an election season. Many tribes already face severe infrastructure and public services deficits, so allocating funds to citizens just for being enrolled in the tribe puts tribes in an even larger hole. Accordingly, Ernie Stevens Jr., Chairman of the National Indian Gaming Association, has stated, “[t]he per capita destroys your economy and your budget.”

Finances aside, per capita payments can undermine a tribe's culture. Indians worked to support themselves and their families prior to European contact and well after it. Colonization created dependency on the federal government. Acclaimed CEO of Ho-Chunk, Inc., Lance Morgan has asserted that per capita payments are a “new form of welfare” and perpetuate the dependency that tribes have been trapped in for generations. Dependency on per capita payments is problematic because the money can run out, and per capita payments also fuel stereotypes that undermine tribal sovereignty. However, relatively little is known about how per capita payments impact tribes or their citizens.

Sparse scholarly literature exists on tribal per capita payments, but the effects of per capita payments have policy implications beyond Indian country's borders. Indigenous communities outside the United States are considering various wealth management strategies, and some are making per capita payments. Within the United States, Andrew Yang's bid for the presidency brought discussions of a universal basic income to the United States' forefront. Other countries are assessing the merits of distributing cash directly to their citizens, and universal basic income experiments are underway. The economic chaos and unemployment caused by the COVID-19 pandemic has made the universal basic income all the more relevant. Lessons from tribal experiences with per capita payments can inform universal basic income debates.

This Article begins by providing socioeconomic background data on American Indians. It then briefly describes the development of per capita payments and the legal rules governing per capita payments derived from casinos. Next, the Article summarizes the potential benefits of per capita payments. Then, the Article asserts two potential problems per capita payments may cause. First, per capita payments can subvert tribal governance by diverting funds from institution-building and by making the size of per capita payments the key issue in tribal politics. Second, the Article asserts per capita payments may destroy the incentive for recipients to work, and hard work is a traditional indigenous value. After discussing the perils of per capita payments, the Article recommends shifting away from per capita payments by using the money currently allocated to per capita payments to incentivize positive behaviors among tribal citizens.

[. . .]

Per capita payments are a contentious topic, and literature on the topic is scarce. Each tribe must make its own choice on whether per capita payments are appropriate for it. Although a few studies suggest “small” per capita payments have positive effects, numerous tribal leaders believe per capita payments can cause problems. Per capita payments can undermine tribal governance by sacrificing the future welfare of the tribe to satisfy the electorate's immediate demand for easy money. Per capita payments can also foster an entitlement mentality whereby recipients come to expect their tribe to provide per capita as a way of life. This in turn feeds into the dependency that much of Indian country has been ensnared in for generations. Indeed, it is ironic that as tribes have become more independent of the federal government, some tribal citizens have grown dependent on free money from their tribe. Ultimately, each per capita recipient is responsible for how she uses the money. Tribes, however, may consider wielding per capita payments to incentivize constructive behaviors rather than issuing money for enrollment in the tribe.

Associate Professor at Southern University Law Center (SULC). Managing Fellow of SULC's Native American Law and Policy Institute. Research Fellow of the Center for Governance and Markets at the University of Pittsburgh.

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