Fresh from his first official trip to Washington since becoming governor, Andrew Cuomo is expected to visit Buffalo and Niagara Falls today and talk about jobs and possibly weigh in on the budget crisis in the cataract city that is mostly the result of the state’s gaming war with the Seneca Nation.
Cuomo went to Washington on Monday, seeking $42 billion in aid for the hurricane-ravaged state in the aftermath of Sandy’s devastation. He will come to Western New York today, where he is expected to have some good economic news for the city of Buffalo and possibly the city of Niagara Falls as well.
But unless Cuomo is bringing boatloads of cash to Niagara Falls or a pledge to pay the city the $60 million owed from casino slot revenue being withheld by the Senecas no matter the outcome of the current arbitration, he will be coming to a city trapped between a rock and hard place on how to balance its budget without breaking the backs of taxpayers.
Mayor Paul Dyster and the City Council are trying to agree on how to make the budget work, but so far they are still far apart. City lawmakers want to avoid a tax hike and service cuts proposed by the mayor to deal with a $4 million shortfall and still maintain economic development initiatives and vital services. A possible component of that formula would be for the city to accept a Cuomo-engineered $13.4 million bailout package from the New York State Power Authority, but there are strings attached.
Lawmakers are balking at the “spin-up” because they fear the city will never receive the casino money and be unable to pay back the accelerated aid, meaning the loss of millions in future payments from the Power Authority owed under the relicensing agreement. So far, there are no public assurances from the state that it will “cover” the $60 million payment if the arbitration goes south, and without that money the city would never be able to pay back the “spin-up” funds and would lose the future payments. What’s being said privately in Albany has not reached the ears of nervous lawmakers who are not confident the money will be there.
A big part of the council budget plan, which eliminates tax increases and restores jobs, is to sever ties with the state’s USA Niagara, a savings of $3.1 million next year. Many on the council believe the agency has underperformed and has not provided the development return on the $33 million it has received over the last 11 years.
Mayor Dyster, who believes a strong economic development program is vital to the city’s future, disagrees. Dyster believes the city has made progress on major development projects (Giacomo, Culinary Institute among them) in recent years, aided by USA Niagara, and fears that lawmakers are risking future development progress by being short-sighted under the budget pressure by voting to gut the economic development department (2 key positions) and severing ties with the state development agency.
Some have asked why the state doesn’t fund USA Niagara directly, since it is a state-run agency, and allow Niagara Falls to keep the $3 million a year in AIM money it gives to the agency out of its $17 million allotment. Maybe the governor will have something to say about that situation when he makes a rare visit to the Falls today. But Hurricane Sandy has left the state in a difficult position and there’s no guarantee on the gaming arbitration outcome which could be a man-made catastrophe for Niagara Falls with a tax-free casino paying nothing for its lucrative setting.
And there’s always the Maid of the Mist, the most popular tourist attraction around that has been operated by Jimmy Glynn under a sweetheart lease deal with the state forever. Across the river, they opened up bidding on the boat ride and will reap a windfall in payments from a California company that won the bid. Will New York open up the bidding and boost its return like the Canadian Parks Commission? Or will the Glynn family get a bailout from the state and continue to operate under another sweetheart agreement that leaves taxpayers out in the cold?
We’ll see what’s on the governor’s mind with all the perils facing Niagara Falls with some blaming the state for much of the mess. By the way, next Monday, State Comptroller Tom DiNapoli will pay a visit to Niagara Falls and meet with Mayor Dyster and other officials.