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The massive 27 percent residential tax increase proposed in Mayor Irene Elia's 2001 budget may serve to vacate large sections of the city's South End and open them up for development, something some property owners there believe is the real motivation behind the unprecedented move.
"That's my margin every year," said one man who owns dozens of rental properties in the area. He asked not to be identified. "If that goes through, it means I'm working all year for nothing."
The $4.8 million tax levy increase would be the largest in city history. In addition to the 27 percent hike for residential property, business property taxes would jump by 16.6 percent, wiping out efforts made by the City Council over the past two years to equalize taxes on all types of property.
Elia, a Republican, had pledged on numerous occasions that there would be no tax increase under her watch. Most recently, she did so in her State of the City address delivered Aug. 7.
Less than two months later, City Administrator Al Joseph announced what he said would be a "substantial" tax increase. But few were prepared for the magnitude of the plan the Mayor ultimately presented to City Council on Oct. 3.
City Council Chairman Anthony Quaranto said he believed Elia's campaign pledge not only to hold the line on taxes, but to reduce the budgets of every city department by 10 percent from 1999 levels.
And Elia herself seemed somewhat confused last week when, at one point, she said she had "no idea" until recently exactly how bad the city's finances were and then, in a separate statement, claimed to have been working diligently on the budget since first taking office in January.
For her part, the Mayor let the City Council take the heat for her actions. The Oct. 11 Council meeting was seen by many observers as the most important of her term in office, but she chose instead to attend a tourism presentation at the convention center. It was the first council meeting she's missed since taking office, other than when she was out of town.
More than 150 residents jammed the Council Chambers to protest the increase, and Buffalo television newscasters had a field day with the story. While showing a picture of the Falls and upper rapids, Channel 7 anchor woman Susan Banks announced a "torrent of taxation for the Cataract City," and later called the increase "nothing short of mind-boggling."
Clifford Thorn, who owns a home on Fifth Street, said he was outraged by the Elia proposal.
"They give away the keys to the city to every thief that comes in here from out of town and those of us who have lived here our whole lives now face losing our homes," he said. "It's insane."
That view would seem to be borne out by an Oct. 11 report issued by the United States Environmental Protection Agency and obtained by the Reporter. While the report deals with the rehabilitation of brownfields in the Buffalo-Niagara Falls area, it paints a bleak picture of the area's economy.
"Population loss, economic stagnation, a weak real estate market and a high concentration of sites with environmental contamination make this area one of the country's most distressed regions," the report states.
More than 40 percent of Niagara Falls residents live below the poverty level, and the Buffalo-Niagara region is among the bottom 10 percent of the 100 largest U.S. cities in terms of household income, unemployment and people on public assistance, according to the report. Unemployment in the Falls is listed as 9.4 percent.
For those who have made their living renovating and renting properties, particularly in the South End, the tax hike may be disastrous. Many of those properties are assessed at values far exceeding what they could be sold for, if they could be sold at all. Furthermore, larger buildings are taxed at the higher business rate. For a landlord with 10, 20 or 50 rental units scattered throughout the neighborhood, the increase could amounts to thousands of dollars annually.
"I've been working down here for 20 years and I'll just walk away. So will a lot of others," one landlord said. "This is urban renewal all over again, except now they want to grab the land on the north side of Niagara Street."
In repeated statements last week, the Mayor seemed oblivious to residents' concerns. She said the people of Niagara Falls should "all just hold hands" and cited what she said was the positive development that has taken place during her first year in office, including the stalled AquaFalls project, the boarded-up Rainbow Centre Mall and the recent announcement that some people from China will operate a flea market for one month in some vacant office space at the Occidental Petroleum Building.