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Council Overrides Mayoral Vetoes, Eliminates Tax Hike;

State Comptroller Says Falls Faces Severe Challenges

By Tony Farina

The City Council voted to override twenty-seven of Mayor Paul Dyster’s forty-two vetoes to their amended city budget on Monday night, including a unanimous rejection of the mayor’s veto of their plan to cut the $3.1 million that would have gone to USA Niagara, the state’s local development agency, for at least the coming year, representing the biggest piece of the projected $4 million-plus deficit.

Council members Charles Walker and Kristen Grandinetti, normally strong supporters of the mayor, joined their colleagues, Chairman Sam Fruscione, Glenn Choolokian, and Bob Anderson in the 5 – 0 vote to override the mayor’s USA Niagara veto with Grandinetti praising the state agency’s downtown development efforts and saying she hopes the ties can be restored when the city regains its fiscal health.

The action by the council wipes out the proposed 8.3 percent tax increase for property owners and the 5 percent tax increase on businesses originally contained in the mayor’s disaster budget. In fact, as a result of the cuts made to the spending plan by lawmakers and upheld in large measure in Monday’s voting, there will actually be a slight decrease in the tax rate (less than $1 per assessed value) to businesses.

“We’ve done the people’s work,” said Council Chairman Sam Fruscione in praising the budget that lawmakers crafted in the face of the city’s worsening financial crisis. “We balanced the budget without raising taxes and that’s the good news coming out of this. We just don’t have the money right now to pay $3.1 million to USA Niagara and let’s hope the state sees fit to fund the agency until the gaming issue is resolved and we’re in a better place.”

Fruscione credited his fellow council member, Choolokian, with doing the dirty work in putting the council budget amendments together which included cutting the salary of the city administrator by $40,000, eliminating a business planning director’s position ($58,000), and decreasing overtime for police patrols by $100,000.

“At the end of the day, we’re here to serve the people,” said Choolokian of the budget which spares property owners and businesses a tax increase despite the loss of roughly $60 million in casino revenue over the last three years due to the gaming war between the state and the Seneca Nation.

It was that very gaming war that in large part forced Mayor Dyster to submit the disaster spending plan in the first place, and his position was reinforced on Monday by an assessment from State Comptroller Thomas DiNapoli.

DiNapoli visited the Cataract City to deliver one of the first in a series of fiscal profiles on cities across the state. The other city cited by DiNapoli on Monday was Salamanca, another host city in the gaming compact region that has been severely affected by the casino revenue impasse.

“Niagara Falls and Salamanca face more severe stresses than most other cities in the state, and the loss of casino revenue has exacerbated their problems,” DiNapoli said in a press release. “City officials have been forced to make drastic budget cuts, spend down reserves and seek emergency aid from the state. Unfortunately, the systemic problems that have plagued these communities cannot be properly addressed until the casino gaming issue is resolved.”

The comptroller’s report also pointed out that Niagara Falls has struggled due to a number of socio-economic factors including severe population loss, decreasing property values and a significant decline in revenue. In addition, DiNapoli says the city has exhausted 76 percent of its constitutional debt limit and has $73.8 million in outstanding debt.

Mayor Dyster commended the comptroller for his assessment, stating “the challenges raised in this report present major hurdles for our city. But we remain optimistic that our economic development activities, which are vital to attracting new business investment and new visitors to the city, will be accelerated once the state’s dispute regarding casino revenue is settled. By re-establishing this vital revenue stream, Niagara Falls can begin to reverse the negative trends cited in Comptroller DiNapoli’s report.”

In his profile overview of Niagara Falls, DiNapoli said the city appeared to be making progress in building up reserves and investing in economic development in recent years until the gaming dispute forced the city to spend down its fund balance in anticipation of eventually receiving the revenue which it has not received.

City lawmakers said thanks but no thanks to a Cuomo-engineered lump sum spin-up of New York Power Authority (NYPA) relicensing payments ($13.4 million) because there’s no guarantee in their minds that the city will eventually receive the casino money and be able to pay back the spin-up and avoid losing $22 million in future payments.

 

 

Niagara Falls Reporter www.niagarafallsreporter.com

Dec 04 , 2012