NIAGARA FALLS, N.Y. (WIVB)- Niagara Falls city leaders are reacting to a state audit that criticizes the city for its saving and spending practices.
It’s unknown if Seneca Niagara Casino payments to the state will continue. The Seneca Nation argues it no longer needs to send any money to Albany but its right to operate without competition extends to 2023. Governor Cuomo disagrees and threatens to end the Nation’s exclusive right to operate if payments don’t continue.
While both sides are locked in the dispute, a new audit from State Comptroller Thomas DiNapoli criticizes the city for relying too heavily on the casino revenue.
It says each year the city has used more of the revenue to fill the budget gap and by the end of 2017 the fund balance will be depleted.
The audit calls on the city to come up with a multiyear plan to move forward.
“The task is large but certainly we can do this,” said City Councilmember Andrew Touma. “We’ve had this conversation for quite some time.”
Touma said last year the city cut casino revenue in the budget by 15 percent and planned to cut it by 10 percent each following year.
“We realized, you know, we need to start pulling that back and use it for economic development to grow the city, rather than use if for day to day operations,” he said. “Now because of the casino issue, we’re taking a much more aggressive approach.”
Touma told News 4 they need to cut expenses, consolidate departments and share more services.
He said the city was able to save half a million dollars immediately through the contracts approved with the major unions.
“As long as I live, I don’t want to see a property tax increase,” he said. “I don’t think there’s going to be one this year but that doesn’t mean there’s not going to be one down the road.”
The audit shows since 2015 property tax revenue hasn’t grown. The Council did not approve a tax hike in the last budget.
“Sales tax revenue, bed tax revenue, parking revenues are growing but in spite of all of the new construction in Niagara Falls a lot of the property tax increase hasn’t hit our bottom line,” said Mayor Paul Dyster.
He told News 4 that because of pilot agreements the city can’t collect taxes for some new hotels for years.
On July 1, the city froze all non-essential spending to accommodate for the lack of casino revenue, according to Dyster.
“There’s a bright future ahead but obviously we’re going to have to get through some difficult times in the next year or two to get there,” he said.
Republican Councilmember Kenny Tompkins told us he agrees with his colleagues that the city needs to look at sharing more services and consolidating departments.
He said steps forward will depend on what’s in the Mayor’s upcoming budget.
Republican State Senator Rob Ortt issued this statement,” The Comptroller’s report comes as no surprise, and follows warnings recently expressed by the New York State Financial Control Board. We know the cause – years of irresponsible use of casino revenue. Now we know the solution. This report clearly outlines the steps Niagara Falls city officials need to take to avoid a considerable budget gap. The decisions that lie ahead will be difficult ones, but they will be vital to keeping the city afloat and away from fiscal insolvency. This is what true leadership requires, and this is what Falls residents deserve.”