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Like a poker player who has wagered a stack of chips on a hand only to have an opponent draw a pair of aces, the town of Ledyard has a tough call on its long, costly legal battle over taxing leased slot machines at Foxwoods Resort Casino.
After a federal judge ruled last week that the town could not collect taxes on such equipment, the town must weigh whether to cut its losses - legal bills have skyrocketed to more than $900,000 over the past six years - or to spend more money appealing the ruling to a higher court.
"I think we have a strong case for an appeal," Ledyard Mayor John Rodolico said Monday, noting that much more is at stake than simply tax revenues from slot machines. He said numerous other retail stores and restaurants do business at Foxwoods, and if they also were allowed to avoid paying municipal property taxes it would be a devastating loss to the town.
What's more, now that a Greenwich-based developer plans to build a 320,000-square-foot, 85-store outlet mall on land leased from the tribe, even more revenues could be lost if the ruling by Senior U.S. District Judge Warren W. Eginton of Bridgeport were left to stand. Judge Eginton had granted the Mashantucket Pequot Tribe's motion for summary judgment in the case and denied motions filed by the defendants - the state, the Town of Ledyard and the town's tax assessor and tax collector.
"The amount of money that's at risk is significant. It would be hard for the town to walk away from this," the mayor said.
The town began levying property taxes on the slot machines in 2003; three years later the Mashantuckets and Atlantic City Coin & Slot Service of Pleasantville, N.J., which leases machines to the tribe, sued Ledyard, claiming the town disregarded federal Indian law and interfered with the tribe's gaming operations, self-determination and sovereign immunity.
Mayor Rodolico said he hasn't had a chance to discuss last week's ruling with the Town Council or with attorneys representing the town but expected to do so this week.
The mayor also said he has been meeting with tribal officials and is open to continued negotiations.
This is a good sign, and The Day encourages both sides to settle the tax issue outside of court before they spend more money on legal fees.
Mayor Rodolico, who was elected last November, had pledged to improve often-fractious relations with the tribe. This sentiment also has been expressed by Rodney Butler, the Mashantuckets' tribal chairman.
Now is the perfect opportunity to fulfill those commitments.
Certainly it also is in the tribe's interest to resolve the dispute, since, like the town, it has had to foot the bill for extensive litigation.
The issue also could affect town-tribal taxes at Mohegan Sun and across the country.
The town of Montville and the Mohegans share a memorandum of understanding establishing that Mohegan Sun will pay taxes on non-tribal personal property to the town, including slot machines. Ledyard and the Mashantuckets should learn from that example.