Niagara Gazette

Local News

December 10, 2012

Familiar financial outlook


Niagara Gazette —

The profile points to the collapse of local industry and the city's 51 percent decline in population - the most of any city in the state since reaching its peak in 1960 - as major contributors to current economic struggles.

Niagara Falls and Salamanca face unique fiscal challenges, each dealing with the loss of casino revenues. But, the two cities also face challenges causing fiscal stress in many upstate communities like falling tax revenues and ballooning health care and pension costs, DiNapoli said.

"Local governments are facing more stress today than anytime before," DiNapoli said. "Those problems are not going away anytime soon."

DiNapoli's report notes that Niagara Falls was making some "headway" recently by building up its reserves and investing in economic development activities to attract business. It also suggests the gaming revenue dispute hampered those efforts, prompting the city to spend down its fund balance in both 2010 and 2011. 

The report also cautions that the city remains in danger of exceeding its "Constitutional Tax Limit," which caps the amount of property taxes cities, villages and counties in New York State are allowed levy. 

"Most cities are not in danger of exceeding this limit, which is set at 2 percent of the five-year average of their full valuation," the report reads. "However, in 2004, Niagara Falls came very close to its limit, and by 2006, the city was within 2 percentage points of it, giving the city very little flexibility to increase its levy. Although the city had a more comfortable tax margin of about 23 percent as of 2012, it is still considered close, especially since the city's property tax value growth remains slow, suppressing growth in the CTL." 

DiNapoli said the fiscal profiles, which will be issued and updated on an annual basis, are synthesized from data the state already collects from municipalities.

"It's not a new mandate, not a new requirement" DiNapoli said.

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