Cattaraugus County and the City of Salamanca have an agreement that should pave the way for the county, city and Salamanca school district to receive $ 31.5 million in delayed casino payments soon.
New York state and the Seneca Nation had a disagreement over whether the Nation continued to owe the state a percentage of slot machine money in the final seven-year period of the gaming compact signed in 2002. The Senecas maintained they owed the state nothing in the final seven years of the pact.
An arbitration panel ruled 2-1 against the Senecas as did the federal courts. New York froze the Senecas’ bank accounts to force the Tribal Council to make the payment of more than $ 500 million they had held in escrow.
County lawmakers approved the agreement Wednesday before the Salamanca Common Council adopted it unanimously.
The county, city and school district will first receive funds equal to the loss of money to make up for the loss of property taxes on the Allegany Territory in the city of Salamanca by tax exempt members of the Seneca Nation.
Cattaraugus County will receive $ 6.6 million from the settlement, the City of Salamanca will receive $ 5.5 million and the school district $ 1.4 million, said County Administrator Jack Searles, who was involved in the negotiations.
The remaining $ 17.9 million will be divided by giving the city 90% and the county receiving 10%, Searles said.
Salamanca city government, which counted on funds from the casino funding for its budget, borrowed $ 15 million from New York state to avoid layoffs after the city spent its rainy day fund.
The division of the casino funding had been a three-tiered process with tax obligations coming first, followed by direct costs and funds for economic development, Searles noted. It is now a two-step process: covering property taxes lost when Senecas purchase property in Salamanca and dividing the remainder 90-10.
Searles said the agreement, which was also approved by the Salamanca Common Council, only goes through Dec. 31, 2023, the date when the Seneca gaming pact expires. Both the state and Seneca officials are in discussions about a potential compact successor.
“The ball is in the state’s court as far as the distribution of the funds,” Searles said. “We’ve done our part.” Cattaraugus County and Salamanca are the last host communities to receive their share of the Seneca gaming compact funds, he added.
“We’re expecting the transfer to happen fairly soon,” Searles said.
Subtracting $ 13.6 million for the property taxes there is $ 17.9 million remaining from the windfall settlement. Applying the 90-10 split to that gives the county $ 1.7 million and $ 16.1 million for the City of Salamanca.
Adding everything up shows the county will get $ 8.4 million, the city will get $ 21.6 million and the school district will get $ 1.4 million.
“We wanted to make sure the tax loss was taken care of in its entirety,” Searles said.
What might the county do with its share of the casino funding windfall?
“Certainly, the Cattaraugus County Legislature has been exceedingly pro-economic development,” Searles said. He added he would be surprised if there weren’t discussions among county lawmakers on how to best use the windfall.
Beyond the economic development incentives the county provided to Great Lakes Cheese, which is building a $ 500 million cheese plant near Franklinville, and to much smaller projects with grants and loans, county lawmakers have also been investing in infrastructure – primarily roads.
“The roads are arteries to get people to work and business needs good highways,” Searles said. “It’s a type of economic development.”
It is a two-barreled approach, combining heavy investment in business and the county legislature doing what it can to make the county better, more attractive, Searles said.