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Residents of Niagara Falls are about to take it on the chin – not to mention in the nose, the gut and the wallet – because the state of New York and the Seneca Nation of Indians haven’t resolved their differences over casino gambling in Western New York.

But make no mistake: Either way this shakes out, it is Albany that is to blame for a crushing tax increase that Niagara Falls residents and businesses cannot afford.

Mayor Paul A. Dyster has proposed a “disaster budget” that includes property tax increases of 8.3 percent for homeowners and 5 percent for businesses. It would also eliminate the equivalent of 27.5 full-time positions, of which nine are currently vacant or about to become so through retirement.

What seems like a small number of layoffs will have far-reaching effects, because the union contract prevents the city from hiring any temporary or seasonal workers while any full-time hourly employee is on layoff. That will cost the city 82 seasonal workers who would have done such things as paved streets and acted as lifeguards at municipal swimming pools.

Accountability for this financial disaster lies in Albany, which has, at a minimum, played fast and loose with the terms of the agreement that put a Seneca casino smack in the middle of the city’s downtown. Without the dispute that the state fomented, Niagara Falls would be at least $60 million richer today.

The question is whether the state has encroached on an “exclusivity zone” defined by the compact that allowed the casino to be built. Given the state-sponsored gambling under way in Hamburg and Batavia, that question seems to answer itself, but in terms of assigning blame for the Senecas’ decision to withhold the required payments, it is fair to await the results of the arbitration that should be completed next year.

But in terms of sparing the residents and business owners of Niagara Falls a punishing tax blow – one that most can’t absorb and that the city can do nothing to control – waiting is not an option. Albany has to step in. Now.

There was talk not long ago that Albany would front the money that is due to Niagara Falls from the casino, but that talk appears to have gone nowhere. Gov. Andrew M. Cuomo needs to come up with that $60 million because, however the arbitration ends, the money will be due to the city from the state.

If Albany prevails in the arbitration, the Senecas will pay what they owe to the state and the state will forward to Niagara Falls its take. If the state loses, then it violated the terms of the contract and left Niagara Falls high and dry. In that case, the state’s own recklessness will have brought on the city’s financial crisis, and it will have an obligation to pay up.

That payment needs to happen now, before a huge tax increase is allowed to take effect. The state needs to forward the city’s $60 million so it can avoid a disaster it did nothing to precipitate.

Cuomo’s record in nearly two years as governor has been mainly thoughtful, tough-minded and right. And certainly in the wake of Superstorm Sandy he has enormous financial headaches to deal with. But to allow this tax increase to go forward, when Albany’s fingerprints are all over the problem, would be a serious misstep. He needs to take the lead and send Niagara Falls the money.