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Ledyard's costly but necessary legal battle

Published January 30. 2012 4:00AM

The town of Ledyard has had a love-hate relationship with Foxwoods Resort Casino ever since one of the world's largest gambling operations opened in February 1992.

On one hand many residents welcome the thousands of jobs, top entertainment and ancillary economic growth supported by Foxwoods, but others complain about increased traffic and crime, as well as Ledyard's powerlessness to force the Mashantucket Pequot Tribal Nation to comply with local zoning regulations.

Other grievances, not surprisingly, involve money - particularly the sovereign nation's deal to pay the state a quarter of its slot machine revenues instead of local taxes on reservation property in the northeastern corner of Ledyard.

Though the town grudgingly concedes it can't collect these revenues, it has for years been trying to levy taxes on personal property owned by non-Indians on reservation lands - specifically slot machines that a New Jersey company leases to the tribe.

Six years ago the tribe and Atlantic City Coin & Slot Service sued Ledyard to block these taxes, claiming such municipal action disregards well-established principles of federal Indian law and interferes with the tribe's gaming operations, self-determination and sovereign immunity.

So far, the town has spent $900,000 fighting the litigation - a whopping sum that could have been used to hire teachers, repave miles of roads or buy thousands of new library books.

The Day reported last week that a ruling by U.S. District Judge Warren W. Eginton in Bridgeport is imminent, and while no one can predict how the lawsuit will be decided it's likely the losing party would consider an appeal.

Whatever the outcome, therefore, Ledyard will have an expensive decision to make: Drop legal objections and write off its losses, or continue the battle.

We urge town leaders to keep fighting. Ledyard has invested too much money in the case, and too much remains at stake.

While it's difficult to assess the exact amount the town would stand to gain or lose in any given year based on the shifting number of slot machines, it's clear that in the long run the revenues eventually would cover Ledyard's costs.

The anticipated ruling would impact not only Foxwoods but also Indian-owned casinos across the country, and it's unfortunate Ledyard has to pay for litigation that others stand to benefit from. At the very least the town should explore ways it could receive financial support from other government entities.

The issue is complex and anything but uniform. Across the Thames River the town of Montville was able to work out a tax-payment arrangement with the Mohegan tribe, which operates the Mohegan Sun on its reservation.

That spirit of cooperation has been a hallmark of Montville-Mohegan relations, a sharp contrast to the frequent contentiousness between the Pequots and neighboring towns.

So far, only the lawyers have profited from this long-standing dispute. Too bad for the town, and too bad for the tribe.

Ledyard Mayor John Rodolico last week called the situation unfortunate.

"Being a small town, we're a victim of decisions that were made by the federal and state government, and much of the law is being made up as we go along on this case," he said. "The primary issue we have in the case is protecting our taxpayers."

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