PETER CONRADI/Bullet News
Revenues at the city of Niagara Falls and the Region will take a significant hit in 2013 due to a 50 per cent property assessment reduction for Fallsview Casino.
Niagara Falls finance director Todd Harrison said the Casino’s MPAC assessment for 2013 will be $278 million, down from $564 million where it stood from 2004 to 2012.
“It’s a lot,” Harrison said. “We’re predicting it means we’ll be getting $2.8 million less from Fallsview Casino this year. We were expecting a cut, so we’ve been looking to identify some opportunities to offset that loss through reviewing expenditures and revenue.
“But it’s significant when you consider that our total budget is $99 million. A $2.8-million reduction is a lot.”
At the Region, acting director of financial management and planning, and acting deputy treasurer Chris McQueen said the MPAC cut will mean a further tax reduction of about $3 million for Fallsview Casino. The Casino paid about $7 million in regional taxes last year.
“When we went into the 2013 budget, which has already been approved, we were able to mitigate the reduction because we budgeted knowing that reduction was coming, and we have a tax-writeoff reserve, which is sort of our other safeguard.”
MPAC is the agency that assesses property values in Ontario. Owners are able to appeal the assessment if they think it doesn’t reflect the value of their property. In 2012 the average single-family detached home in Niagara Falls increased in value over the last four-year period to $221,000 from $210,000, according to MPAC.
With a business, though, the process is more complicated. It takes into account things like cash flow and revenue and the overall value of an operation. Owners are still able to appeal, though, and Ontario Lottery and Gaming has been arguing since the doors opened on Fallsview Casino in 2004 that the MPAC assessment is too high. An ongoing appeal of that assessment from 2004 to 2012 has still not been settled. If OLG is successful with that appeal, it stands to receive a substantial refund from the city of Niagara Falls and the Region – something around $3 million from each level of government over nine years – or around $54 million in total.
Niagara Falls is fighting that appeal, and council met in-camera last Tuesday to plot its latest course of action.
Local officials at Fallsview Casino routinely deflect questions on this matter to OLG, where spokesman Rui Brum said the Casino will continue to pay its taxes as it has always done. He confirmed the MPAC appeal is ongoing and did not provide further details.
Meanwhile, the loss of revenue was not sitting well with Niagara Falls Mayor Jim Diodati.
“It’s a very negative thing,” he said. “It passes the burden on to the rest of the taxpayers in the community. It’s very frustrating to deal with this. We’ve been trying to negotiate with OLG for quite some time. It’s a real bone of contention.
“No one you will speak to will agree with this type of direction. Nobody. We are happy to host a casino, but you go into a deal with a certain set of rules and an understanding, and then the rules change part way through the game. They are rules you can argue about, but have no impact on.
“There is no magic money tree out back. The bills have to be paid. And when we lose revenue they have to be paid by the rest of the taxpayers. There has to be a formula for assessing property that captures all the value. They have one of the most valuable pieces of real estate in the city. They have prime falls-view property. That’s worth a lot of money. They need to pay a fair value for it.”
The Casino would argue they are playing within the rules – rules that allow the system to consider the value of their business when determining property assessment. And the numbers are declining.
Niagara’s casinos took in $599.8 million in 2010-11, down from $617.9 million the previous year and $632.7 million two years ago. They had 8.4 million customers in 2010-11, 9.1 million in 2010-09 and 9.5 million in 2009-08.
Still, Diodati says that does not justify the city taking such a large hit. He said the value of the Casino’s land is not decreasing, and that assessment decreases such as this creates bad feeling in the community – among residents and fellow businesspeople alike. And he worries what other hotels and attractions in the city will do when they learn about the Casino’s windfall.
“I’m sure this might encourage others to launch their own appeals. And when people do that it will again will be passed on to taxpayers. They are setting the stage for discontent and for a lot of resentment.”
About 4,500 people work at the two casino properties in Niagara Falls, which makes Fallsview Casino and Casino Niagara the No. 2 local employers behind only the District School Board of Niagara, according to figures from the Region.
One Comment on "TAX WINDFALL FOR CASINO: Municipal revenues take a hit with ‘significant’ property assessment cut to Fallsview"
The city should really consider taxing the Scotia Bank Convention Centre. Especially with less money flowing in from the Casino.