DiNapoli: Niagara Falls, Salamanca fiscally distressed

Dec 10, 2012

The state's top fiscal watchdog appeared in Niagara Falls on Monday to outline an already dismal budget picture.

Comptroller Thomas DiNapoli says the cities of Niagara Falls and Salamanca continue to be hampered by population loss, a drop in property values and major declines in revenue.

The City of Salamanca hasn't seen any revenue from the Seneca Allegany Casino and Hotel since 2009.
Credit File photo

DiNapoli is issuing what he calls 'fiscal stress reports' for cities across the state.  He says Niagara Falls and Salamanca are in more dire straights as Seneca Nation casino revenue payments continue to be withheld due to dispute with the state.  Both cities host Seneca-run casinos.

“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,” said DiNapoli.

Niagara Falls and Salamanca have not received their local share of casino revenues since 2009, when the Senecas halted gambling compact payments to the state.

DiNapoli says to date, Niagara Falls has been deprived of $60 million in casino revenues. Salamanca had been receiving more than $3 million annually as part of the compact.The issue remains tangled in arbitration.

The comptroller says the mayors of Niagara Falls and Salamanca have responded to the situation by administering tough budget cuts.

"The challenge is, they're running out of options," DiNapoli told WBFO News.

In terms of population loss, Niagara Falls has lost 51 percent of its population over the last 50 years, a greater percentage than any other New York city. The city's poverty rate is 17.6 percent among families. It's unemployment rate is 11.4 percent, compared to the statewide average of 8.2 percent.

“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 revenues is settled," said Falls Mayor Paul Dyster, in a statement.

In Salamanca, problems include a depleted fund balance, a 34 percent population loss since 1950, a high percentage of sovereign, tax-exempt properties (62 percent), and a median income of just $32,741.

 “The demands on city government did not go away when casino revenues did,” said Salamanca Mayor Jeffrey L. Pond. “The city is still responsible for ensuring public safety, maintaining roads and providing essential municipal services. Our sustainability, however, has been complicated by the loss of these revenues and the continued erosion of our tax base."