Even With Casino Cash, Tough Decisions Remain for Niagara Falls

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By: Tony Farina

Assuming the Seneca Nation pays the state approximately $200 million in back casino payments as a result of losing the gaming arbitration ruling, the City of Niagara Falls could eventually end up with about $10 million after deductions to replenish the casino reserve fund and support capital projects moving forward.

“We had been averaging about $16 million a year, and it looks like we would receive $29 million to $30 million for the years they [Senecas] didn’t pay the state under the favorable 2 to 1 ruling,” said Niagara Falls City Council President Andy Touma.

Touma said the approximately $10 million represents the amount the city would have left over after all the other entities, like the Housing Authority, Memorial Medical Center, and the school district receive their share of casino money and the $12.3 million loan promised to the city by Gov. Andrew Cuomo to close the 2019 budget gap is put into the spending plan, replacing the loan commitment.

“It would give us breathing room, but we have to fix our structural deficit between now and 2023 when the gaming compact is up for renewal,” said Touma.  “There are many difficult decisions to be made and we hope to receive a three-year plan from the administration to begin that work.”

The structural deficit, of course, represents the difference between revenues and expenses and for the last several years, the city has been using casino funds to balance the budget against the advice of the state comptroller.

But even before the planning begins, still to be determined is for the state and the Senecas to come together and agree on a figure on the back payments, said Mayor Paul Dyster.  Complicating that issue is exactly what the Seneca Nation is going to do about the ruling, pay or something else.

Seneca Nation President Rickey Armstrong was unclear whether the payments will continue despite the ruling that went against the Senecas.

Despite the 2 to 1 decision in favor of the state under the 2002 compact, Armstrong said “We continue to believe as anyone who has read the compact, that the Nation’s obligation was fulfilled, and we believe we had an obligation to the Seneca people to defend the compact, as it was written and agreed upon.”  

Armstrong said after the ruling that the decision is being reviewed as to how to respond, and sources now tell this newspaper as of this writing that no final decision has been made as to the next step by the Senecas.

Nonetheless, and amid the uncertainty still pending, Niagara Falls and the two other host casino cities are moving forward with plans on how to repair the financial damage caused by the stoppage in payments covering the final quarter of 2016, all of 2017, and the first three quarters of 2018.

Assuming that eventually the money will begin flowing again, Touma is warning that Niagara Falls must be prepared to tackle the structural deficit, even with the resumption of casino payments.

“We need to look at the structural deficit,” said Touma, mentioning the garbage user fee considered and rejected during the budget process last year, and more parking meters to help boost revenue.  Garbage user fees are used by many cities, including Buffalo, to help increase revenue to maintain services without raising taxes.

Touma also said that lawmakers are looking at reworking police club schedules, as recommended by the city’s financial advisory board, to help save as much as $700,000 in costs, including on overtime.  Also possible are discussions about municipal contracts, including reopening them in some cases, to attack the structural deficit issue.

“I’m looking forward to working with the Senecas moving forward,” said Touma, “and would like to meet with them on a regular basis,” emphasizing that even with the favorable ruling this time, there is much work to be done to get Niagara Falls on track for the future.

“There are difficult decisions ahead, and we must be prepared to make those decisions,” said Touma.  

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