Niagara Falls Mayor Paul A. Dyster can’t be faulted for taking another couple of weeks to work on what he calls his 2013 “disaster budget,” originally expected to be presented to the City Council on Monday.
Normally we don’t advocate tardiness, but in the case of a city beset by a fiscal nightmare, delay is appropriate as long as the mayor believes it will help his troubled city crawl back onto its knees.
Dyster is being vague about what it is the city has left to explore that might help close what he has described as a multimillion-dollar gap in the budget. That’s his prerogative.
Some of the big pieces floating around out there involve $58 million in unpaid revenues from the Seneca Niagara Casino. Then there’s rising employee costs and a dwindling tax base.
Also looming is whether the state, which is headed for arbitration with the Senecas over those absent revenues, will come to the city’s rescue.
City officials have acted conservatively in previous budgets to avoid just this type of crisis. They generally included about $18 million in casino revenues in the city’s roughly $100 million budget, even though the city was slated to receive more than that. But they could not have expected to have those funds completely choked off for three years.
In 2013, the city has to collect that casino revenue or some substitute in order to come close to making debt payments on its public safety building and paying other budgeted expenses.
The state has a big share of responsibility for the city’s financial problems.
The Senecas have withheld money owed to the state and several cities, including Niagara Falls, on what is an understandable agitation that the state violated the gambling compact by allowing non-Indian gambling within the exclusivity zone.
The state needs to come up with a creative solution to get some cash into the hands of the city. It may not be all of the $58 million in casino revenue Niagara Falls hasn’t received for about three years. But the state needs to get money in the city’s pocket, allowing officials to reset the financial clock.
Talk of a state bailout, however, doesn’t let the city’s elected officials off the hook.
Just like every other upstate municipality, Niagara Falls has to struggle to balance revenues, mostly from property taxes, with increases in personnel costs, driven by binding arbitration for public safety employees and rising health care and pension costs.
Through careful management, city officials generated cash reserves of $20 million in a “special projects fund,” and had a multi-year plan on how they would spend a portion of that money. But then disaster started unfolding.
When the casino revenue stopped, city officials, thinking this was a temporary situation, made the decision to take money from that fund to balance the budget, rather than increase taxes.
The thought was that on the day the city got its casino money, the fund balance would be restored.
Now that $20 million fund has dried up as the fight over casino revenues drags on. City officials have to face tough decisions on cutbacks in public safety and public works, likely layoffs elsewhere and a possible end to quality-of-life programs.
Not delivering the mayor’s budget on Monday is the least of the city’s problems.