Renewed Revenue Stream

The Seneca Nation of Indians doesn’t have to worry about private casino competition for the foreseeable future following an agreement signed with New York state Thursday, and municipalities hosting the casinos are also breathing a sigh of relief.

The deal, announced by Gov. Andrew Cuomo and Seneca Nation President Barry Snyder in Niagara Falls, resolves a four-year disagreement between the nation and the state during which the nation withheld $559,442,218 in slot machine revenues from the state. In the agreement, the Seneca Nation would keep $209.8 million of the back money with the state receiving the same amount of $209.8 million. The host communities of Salamanca, Niagara Falls and Buffalo would split the remaining $139.9 million.

Cattaraugus County, the Salamanca City Central School District and the city of Salamanca will each receive its portion of $34.5 million set aside for Salamanca.

While the back money is important for the municipalities, both Salamanca Mayor Carm Vecchiarella and Cattaraugus County Administrator Jack Searles said, more importantly, they can both count on an important revenue stream for what is being reported as at least the next 10 years.

“It’s almost like Christmas in July,” Vecchiarella said. “Now we can count on money coming forward. We won’t be asking the state for special loans and grants for $2.5 million to cover back bills. We can start thinking of what we can do going forward with streets, bridges and whatever else we have to do.”

While Cattaraugus County doesn’t see nearly the amount of money Salamanca sees, Searles was equally optimistic about the resumption of payments.

“It is a huge sigh of relief that this matter is resolved,” Searles said. “The Seneca Nation of Indians is a significant economic development agent in Cattaraugus County. We always acknowledge that and foster that relationship. They hire many more people than just members of the Seneca Nation.”

According to Searles, the $34.5 million, like the annual payments, will be distributed in three tiers. The first tier will go toward tax levies for the county, city and school district. Since members of the Seneca Nation are exempt from paying property taxes, part of the payment will cover any property that has come off the tax roll in the past four years. The second tier pays for any costs directly associated with the casino being located in the municipalities. These costs include police and fire, public defenders, the district attorney’s office, gambling-addiction counseling and any other costs which can be shown to be directly associated with the casino. After the first two tiers are paid, any leftover money is split in what is generally a 75-25 ratio between the city and the county for economic development.

“The state has written in that each municipality – once it knows the dollar amount – must develop a plan to spend that money,” Searles said. “We will then submit that to the Empire Development Corporation which will have to approve that plan.”

In the past, Cattaraugus County has used the money to promote Onoville Marina and to establish a mini grant-type program for startup businesses or business expansions.

“We would consider businesses for equipment-type purchases and they would commit to the creation of a certain number of jobs,” Searles said. “Generally over a five-year period, if the jobs were created the loans were forgiven, if the jobs were not created they would pay back the loans.”

The city of Salamanca has had to cut positions and programs in the past four years since the disagreement began, therefore working on what Vecchiarella called a “skeleton crew.” Since he does not yet know when the money will start coming in again, Vecchiarella did not have specific plans to resume programs or positions as of Friday.

“We got by … and our police and fire have been a little short, so we’ll have to see exactly where we are at,” Vecchiarella said. “It depends on what time of year we get the money. If it’s in the summer we would probably restore the DPW, but in the winter we probably wouldn’t need as many.”

The deal, finalized in a face-to-face agreement between Cuomo and Snyder on Wednesday night in Albany, could lead to more cooperation between the two governments in the coming months and years, something to which Vecchiarella looks forward.

“President Snyder is more like myself, aggressive on getting things done. He cuts to the chase,” Vecchiarella said. “Cuomo also shows his aggressiveness from budgets right down to settling disputes.”

Cuomo also said the rest of Western New York will have a stake in his gambling expansion package that could go before voters in November with a referendum. The package is Cuomo’s attempt to allow the first four of seven private casinos to open in three Upstate New York regions in the coming years. If the referendum passes, Cuomo intends to give state’s portion of Seneca Nation slot machine revenues to the Western New York counties in which casinos are not currently located.

“This current governor is very interested in regenerating economic development in the state,” Searles said. “With everybody on the same page, I can’t imagine where we can go from here.”