* Tribal gambling dispute prompts revenue shortfalls
* City faces deeper structural issues
* City's outstanding debt around $73.8 mln
By Edward Krudy
NEW YORK, March 8 Officials from the City of
Niagara Falls, New York, are warning that looming debt payments
could force the cash-strapped city into a crisis later this year
if it does not receive money it says it is owed by the native
American Seneca Nation.
The city faces debt payments of $800,000 in June and a
further $5 million to $6 million by the end of the year,
according to Glenn Choolokian, chairman of Niagara Falls City
Council. That, he says, could push the city over the edge.
"Our financial situation is getting worse and worse," said
Choolokian. "We're in trouble."
Part of Niagara's funds are tied up in a dispute about
gambling revenues between New York State and the Seneca Nation
which operates a casino in the city. Choolokian says the amount
is as much as $66 million and would help the city avoid a
Chookolian said the council had rejected a "disaster
budget," proposed by Mayor Paul Dyster, which would have raised
taxes and laid off workers.
Dyster and the Seneca Nation were not immediately available
Niagara's problems go beyond disputed gambling revenues. A
report in December by the State Comptroller's office highlighted
a drop in revenues, a stagnant tax base and an increasing number
of families living in poverty.
Niagara's financial problems, although particularly acute,
resonate with many struggling towns in northern New York state
where an exodus of industries, and aging populations mean higher
unemployment and a great strain on local finances.
The city's population has almost halved to around 50,000
between 1960 and 2010, the largest drop in any city during the
period, the report found. Nearly one fifth of families live in
poverty and the city's unemployment rate is 11.4 percent,
compared to the state-wide average for cities of 8.2 percent,
according to the December report.
The comptroller's report also found that Niagara has
exhausted 76 percent of its constitutional debt limit and has
$73.8 million in outstanding debt.
The ratings agency Standard & Poor's has the city's debt at
BBB+, still investment grade, but revised its outlook down to
negative in the middle of December, shortly after State
Comptroller Thomas DiNapoli issued his report.
Standards & Poor's pointed to the decline of the city's
manufacturing base and tourism industry, which has hit property
prices and incomes, while exacerbating the city's debt problem.