PETER CONRADI/Bullet News
The City of Niagara Falls will appeal a 50 per cent property assessment reduction awarded to Fallsview Casino – but it could take years before a resolution is seen.
In the meantime, councillors heard Tuesday night they are facing a revenue crisis in dealing with the 2013 operations budget. And a lot of it is due to that new tax assessment given to the casino and some other commercial properties.
As reported last week by Bullet News, the casino’s assessment for 2013 is $278 million, down from $564 million where it stood from 2004 to 2012. That means about $2.8 million less in the city’s coffers per year from this one source, said city finance director Todd Harrison said.
The news did not sit well with politicians, many expressing outrage with the MPAC decision – especially in light of the fact that they are looking at a $3.1-million shortfall in the operations budget – even after factoring in a three per cent tax increase.
“It’s disgraceful,” said Coun. Wayne Gates. “I’m very, very disappointed in what the Casino has done through the government. The Casino and the government have to take another look. We thought we won the lottery when the casinos were built. The taxes were supposed to go down. We heard that a lot. And now we are faced with this.
“I am disappointed as a resident of Niagara Falls and as a city councillor, and we should be saying who is causing (this).”
MPAC is the agency that assesses property values in Ontario. Owners are able to appeal the assessment if they think it doesn’t reflect an accurate market value. For example, in 2012 the average single-family detached home in Niagara Falls increased in value to $221,000 from $210,000 over the last four-year period, according to MPAC.
With a business, though, the process is more complicated. It takes into account things like cash flow and revenue. Owners are still able to appeal, though, and ironically 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 OLG appeal of that assessment from 2004 to 2012 has not been settled. If OLG is successful with that appeal, it stands to receive a significant refund from the city of Niagara Falls and the Region – something around $3 million from each level of government over nine years – or $54 million in total.
Now the City plans its own petition of OLG’s new assessment – in addition to continuing its fight of the initial OLG appeal.
“We think the assessment is way too low and that’s the basis to our appeal,” chief administrative officer Ken Todd told council. “We don’t have an expense problem, we have a revenue problem. “We’re going to be getting close to $3 million less in revenue this year.”
And in subsequent years until the next MPAC assessment period.
“It’s now a structural change that we have to deal with,” Harrison said. “We’ve really been thrown a curveball.”
Coun. Wayne Thomson called it “unbelieveable” that the Casino would receive such a windfall.
The revenue loss sent staff scrambling to come up with ways of saving money. Harrison said about $1.2 million has been shaved from the $99-million operating budget, but the city is looking for another $3.1 million. Raising that entire shortfall through taxes would mean a 5.8 per cent increase on the city portion of the levy, and councillors weren’t prepared to even discuss that possibility.
Nevertheless, some chaffed at items already on the block. For example, staff has taken $100,000 out of pavement maintenance, $75,000 to the library, $270,000 by delaying plans to hire five firefighters for a station that hasn’t been built yet, and $270,000 by reducing off-season service for the WEGO people mover.
Coun. Joyce Morocco said its time for the city to look at cutting 16 fee-for-service agencies – money paid to organizations like the Boys and Girls Club of Niagara, ProjectSHARE, the Humane Society or Niagara Falls Tourism. Those items add up to about $2.6 million, which would go a long way to balancing revenues with expenses.
Staff is recommending fees-for-service recipients not be touched, but wants council to reduce grants to four groups so that they would receive nothing starting in 2015.
Morocco seemed alone on this one. Coun. Wayne Thomson, Coun. Wayne Gates, and Coun. Bart Maves defended payments to fee-for-service groups, and budget chairman Victor Pietrangelo said most around the table seemed to side with that point of view.
Harrison said staff will be looking for cuts over the next month.
He also presented the $32.1-million capital budget for the first time.
2 Comments on "BUDGET CRISIS: Revenue shortfall keeps Casino tax cut front-and-centre at Niagara Falls council meeting"
Perhaps Niagara Falls should point out to Hamilton and Toronto how they will be treated by hosting a casino for the province.
Most businesses have been subsidizing the residential tax rate for decades. Business, uses less in services than it pays, and Residential taxpayers use more in service than they pay. It’s easier to charge unreasonable taxes to business as there are simply fewer of them who vote…..ergo, they get overcharged. This works great until they pay so much that it’s cheaper to find a new place to do business and they close up shop or they fight back and appeal…….and win. This isn’t about the Casino getting a free ride. It’s actually the exact opposite. The chicken has come home to roost! Start by doing a full cost benefit analysis of your fire services. Go to privatized or volunteer firefighting and you can save 10 million a year just on that. Stop sending firemen out on calls that have nothing to do with a fire and watch your expenses drop.