Published On: Mon, Apr 26th, 2021

Ask Dr. Per Cap: The business of per cap

 

Dear Dr. Per Cap

When will we know how much June Per Cap will be?  I’d like to know so I can make a budget.

– Planning Ahead

 

Dear Planning Ahead,

I think a lot of EBCI folks would love to know the amount of upcoming per capita sooner rather than later; however, the process of paying per cap is detailed and complex.

I recently had the privilege of chatting with Cory Blankenship, Secretary of Treasury for the EBCI, who explained how it all works.  Semi-annual per cap payments are based on distribution periods or timeframes.  June per cap comes from casino revenues earned between October of the previous year and March of the current year.    December per cap reflects revenues between April and September of the current year.

Infographic by Luke Swimmer

Therefore the amount of gaming profits used to calculate per cap is not earned until two months before payments are made.  Per cap is then based on a 50/50 split between tribal government and EBCI citizens.  Cherokee Indian Hospital, Cherokee Central Schools, Police, Fire, Emergency Services, Day Care, the EBCI General Fund, Public Health and Human Services, Sanitation, and Higher Education are funded either partially or wholly from casino revenue.  Moreover, these revenues are sent monthly to the tribe to provide a continuous funding stream for programs and services.

The 50 percent of profits that are deposited into the EBCI Per Capita Fund earn interest that increases the amount of per cap net profits. This means the per capita calculation is not just the 50% of casino profits.  It also includes the amount of interest earned on the per capita account prior to distribution – a little added bonus!

But there’s more.  Budget and Finance must also request updated tribal enrollment figures which account for deaths, births, and any new enrolled members since the previous distribution period.  This provides an accurate head count so everyone gets their fair share.  Kind of like divvying up one of grandma’s fresh baked apple pies – no drama if everyone’s slice is the same size!

Here’s another interesting factoid – members who pass away prior to a per capita distribution are often still eligible for a share.  The share will be issued to their estate when filed for the number of months they were alive during the distribution period. So the enrollment number isn’t just a head count, it reflects the number of shares eligible to receive per cap.

The Enrollment Office has processes to determine the number of shares, figures which are typically released about six weeks before distribution.  Final numbers from casino operations follow a similar timeline.

Next, Per Capita Fund expenses must be paid because there’s no free lunch when managing large institutional investments.  As well as determining how much money needs to be placed into the EBCI Minors Trust Fund along with an updated accounting of Minors Trust beneficiaries.

At this point Budget and Finance has the data to calculate per cap payments.  This process takes about another two weeks before an announcement is made in the regular session of tribal council the month prior to distribution.

After the announcement it takes another two weeks to build payment files which include member information, shares, amounts, garnishments, tax deductions, and payment preferences.  Then there is a final two week period for processing along with reconciliations, double checks, and audits before checks are mailed and direct deposits are posted.

Yep, it’s a whole lot of work and time to make sure folks gets their per cap payments every six months.  Moreover the per capita loan program, which is active again, adds another layer of processing, reconciliation, and audit.

Also remember that per cap is not a guaranteed source of income for tribal members.  While the Eastern Band has been fortunate to see per capita distributions grow over the years there are many factors that can impact the amount of per cap, such as last year’s casino closure due to COVID-19.

For more information about EBCI per cap check out a recording of my conversation with Cory Blankenship at https://youtu.be/dasfQWPJOug

And visit https://www.sequoyahfund.org/dr-per-cap/ for cool budgeting tips and tools to better manage your per capita distributions.

Ask Dr. Per Cap – EBCI Money Smart is brought to you by Sequoyah Fund and Shawn Spruce Consulting. For more information, visit www.sequoyahfund.org. To send a question to Dr. Per Cap, email agoyopi@gmail.com.

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