By Tony Farina
If you are living week-to-week on a paycheck, like many Americans, and suddenly win the lottery for $25,000, your fortunes would improve dramatically and so would your creditworthiness.
You would most likely be able to borrow money for a new car or something else you need at a much lower interest rate because your bank account is flush, at least for the moment.
At least for the immediate future, your financial situation is much improved. However, unless your income flow changes, your financial picture will soon return to where it was. A brief moment in the sun will rapidly disappear unless your income stream improves.
That’s the situation for the City of Niagara Falls when it comes to creditworthiness. Right now, the city has experienced a slight uptick from the
Wall Street credit rating agencies on its bond worthiness, thanks in large measure to many millions received in American Rescue Funds (ARP) during the Covid-19 pandemic, funds intended to help cities recover and protect essential services and lay the groundwork for long-term resilience.
But the ARP funds are a one-time fix and must be spent by end of year2026, and unless the city changes its ways, like implementing a multi-year financial plan and advancing revenue diversification, the rescue fund money will dry up—like casino cash has for now– and the rating agencies will likely lower the bond rating, making it very expensive to go to the bond market to borrow money for capital needs, even as casino revenues remain flat and property tax growth is stagnant.
Mayor Robert Restaino hailed the uptick by the Wall Street agencies, but as one analyst stated, trust is earned through reforms, not bailouts. Unless the city tackles the long-term issues, the cost of borrowing will rise again and the city will be right back where it was before the rescue funds arrived.
In short, the city must turn around its way of doing business, making it more advantageous for private developers and businesses to come to Niagara Falls, and make it more than a one-stop tourist town will little hope of restoring the city to a much better business and taxpayer environment.
As we’ve noted in previous stories, the “silver bullet” approach has not worked in the past and is unlikely to work now and in the future. The mayor’s unfunded “centennial park” arena is not the answer long term, and perhaps not even in the short term.
The city must put together a comprehensive strategy to move forward or it will return to the days before the rescue funds arrived, raising borrowing costs and likely boosting taxes on already stretched-out taxpayers.
Restaino and other leaders must look past the rescue fund bailout and build a future that is more than a one-shot plan, but rather a meaningful and totally comprehensive approach to make the city better again and attempt to retain some of its past glory. The time is now for action.
