The casino gaming compact between the state of New York and the Seneca Nation of Indians expired on Dec. 31, 2023, leaving host communities like the City of Niagara Falls without a legal right to access quarterly revenue payments.
To help alleviate some of the financial strain, the Falls and two other host communities, Buffalo and Salamanca, received advanced casino revenue payments courtesy of Gov. Kathy Hochul last year.
Several prominent Niagara County entities, whose casino revenue shares were covered under a separate piece of state legislation that also expired at the end of 2023, were not so lucky.
Representatives from those entities — the Niagara Falls School District, Niagara Falls Memorial Medical Center, the county’s lead tourism agency Destination Niagara and the Niagara Falls Underground Railroad Heritage Center — have all been forced to adjust the loss of the money.
They’re now lobbying state officials to step up efforts to not only negotiate a new compact but also update the separate piece of state legislation, known as “99h,” that carved out slices of the casino revenue pie for their organizations.
“The bigger issue is that they let 99h expire, which then ends any legal obligation to provide those critical institutions with funding,” said Sara Capan, advisor and executive director for the city’s Underground Railroad Heritage Center.
WHAT WAS 99H?
Under the compact, the Senecas were required to provide the state with 25% of the “net drop” from slot machines operating inside the Nation’s three area casinos — Seneca Niagara in the Falls, Buffalo Creek in Buffalo and Seneca Allegheny. Under the agreement, the state was required to distribute 25% of its share to the host communities.
In an effort to ensure a portion of the funds sent to the Falls were shared with other entities deemed worthy of support, state lawmakers enacted what’s known officially as the “tribal-state compact revenue account,” a piece of legislation commonly known as “99h.”
The legislation initially provided a portion of the city’s share based on designated formulas for five local entities — the school district, the hospital, the tourism agency, the Underground Railroad Museum and the Niagara Frontier Transportation Authority.
In 2016, state lawmakers authorized a modification, adding annual $50,000 payments for the Niagara Falls Housing Authority, Mount St. Mary’s Neighborhood Health Center in Niagara Falls and a Western New York First Response & Preparedness Center that was under development in the Town of Niagara. Funds for the city’s Underground Railroad Heritage Area Commission were also reduced from $350,000 to $200,000.
The original bill followed often heated debate locally among two principal lawmakers — former Democratic Assemblywoman Francine DelMonte and former state Republican state Sen. George Maziarz.
While DelMonte argued against pulling funds from the city’s share to cover distribution to the other entities, Maziarz reasoned failure to do so would result in the city keeping — and potentially wasting — all of the money, leaving none for entities other entities in need like the school district and the hospital.
REVENUE AND EXPENDITURES
Niagara Falls School District Superintendent Mark Laurrie said the district received around $750,000 annually under the terms of 99h while the compact was still in effect. In 2023, the final year the district received part of the city’s casino revenue share, Laurrie said the district received $716,000.
Laurrie said the district used the funds for things like paying off debt service on the cost of construction of the district’s $17.5 million athletic facility upgrades, which were part of a district-wide $66.7 million capital improvement plan.
While he’s no longer counting on casino money each year, Laurrie said the revenue has been “important” to the district in the past and would be welcome amid budgetary constraints at the state level and amid rising concerns about the potential of federal education funding to decrease under the Trump administration.
“We’ve kind of walked away from expecting it as a budget revenue line, nonetheless, we continue to push for legislation that would be part of that,” he said.
“We’ve been fighting to keep that legation alive from before we knew it was going to expire because it’s important to us,” he added.
Joe Ruffolo, CEO of Niagara Falls Memorial Medical Center, said that in peak years prior to the COVID-19 pandemic when casino revenues dropped, his healthcare facility also received as much as $750,000 per year from the city’s share of casino dollars.
He said the hospital used the bulk of the money as seed funds to spur large-scale capital projects, including the development of the medical facility’s inpatient behavioral health centers and renal dialysis, stroke and cardiac care units.
He considers restoring the funding vital to helping the hospital sustain and expand services, however, he’s not confident that will happen without intervention by the state.
“I don’t think it’s on the table to be truthful,” Ruffolo said. “Unless we’re able to lobby through our local legislators to get it directly from the state, I’m kind of pessimistic about the ability to continue to get funding.”
John Percy, president and CEO of Destination Niagara, said casino revenue provided between $1.2 million and $1.8 million annually over the course of the compact. At $1 million, he said the funding represented about 20% of the tourism agency’s total annual budget. Like the other entities, Destination Niagara has not received any casino revenue since the first quarter of 2023. Percy said, in anticipation of the end of the compact, his agency took steps to prepare for the revenue loss through sound budgeting and investment. Still, he said he remains concerned about the impact of the lost revenue on other organizations, including the Underground Railroad Heritage Center, one of the local attractions his organization works to promote.
“It would be great to have a dedicated funding source,” Percy said.
At $200,000 per year, Capan said the casino revenue has also been vital to the operation of the Underground Railroad Heritage Center.
Opened in 2018 in the historic 1863 U.S. Customs House building adjacent to the city’s $44 million Amtrak station, the museum serves as an attraction for tourists while offering visitors information on the history of the Underground Railroad in the Falls.
The center is sanctioned by the National Park Service as part of the Niagara Falls National Heritage Area and operated in partnership with the National Park Service and the Niagara Falls Underground Railroad Heritage Commission. It came together over the course of years with help from local, state and federal officials who considered it important to not only tell the story about the community’s ties to the Underground Railroad but also provide another attraction for Falls visitors.
“Casino funding allowed us to build the heritage center and allows us to operate the heritage center,” Capan said. “The loss of the funding severely limited our ability to provide consistent operations going forward in one of the only cultural attractions that is located outside state park land and directly benefits the City of Niagara Falls.”
The loss of dedicated casino revenue to support the continued operation of the museum has become even more distressing amid increasing uncertainty about federal support for such endeavors under the Trump administration, which has taken steps to cut billions of dollars out the federal budget and is promising more that could impact cultural organizations.
“You see the dismantling of these policies that celebrate this history and yet here we are doing it to ourselves,” she said.
THE CITY’S ADVANCE
The City of Niagara Falls received an advance of payment of $7.6 million courtesy of Hochul last year. No portion of those dollars were shared with any of the entities previously owed funds under the now-expired 99h legislation.
Council Chairman Jim Perry said there’s one simple reason: the city is under no legal obligation to do so.
“There are no requirements for the city to give money to any of those entities,” he said.
When asked if he thought it made sense for the city to allocate some of the funds to support the other entities, Perry deferred to Mayor Robert Restaino, calling it a “judgement call” for the mayor to make.
Restaino claims his administration has reduced the amount of casino revenue used to support the city’s general fund each year down from a peak in the previous administration of $12 million to $8 million this past year. He said the city’s share of casino revenue, including last year’s advance from the state, has helped cover general fund costs for things like road maintenance and expenses tied to collective bargaining agreements with unionized employees. He said it would be “reckless” for the city to give up nearly $8 million used to support its general fund.
“The money that we receive already has a destination,” he said. “Until we can completely wean off of casino funds in the general fund, that’s got to be entered into the conversation too.”
As to the discussion about sharing any portion of the city’s advance, Restaino suggested it is complicated by a number of factors that are not within the city’s control. He said one of the biggest challenges involves the expiration of 99h itself, noting that without a law prescribing how much is owed to any individual entity, there’s no legal language to follow in terms of giving any one or all of them part of the city’s share.
“Not knowing what the compact is going to look like makes it difficult to look at what would a refashioned distribution of resources would look like,” he said.
Restaino said lack of an updated and authorized compact represents another issue in that it calls into question the overall level of revenue the Senecas may end up sharing with the state and, in turn, the host communities. Restaino said he’s been told that the Senecas are interested in lowering the 25% share currently delivered to the state, which he noted could result in the city’s overall share being diminished, perhaps significantly, as well.
“I think the notion that the state receiving 25% of the slot machine revenue, based on just anecdotal discussion, I just don’t know if that’s going to happen again,” he said.
“Not knowing what the compact is going to look like makes it difficult to look at what would a refashioned distribution of resources look like,” he said.
A PUSH FOR RENEWAL
Representatives from the school district, hospital, tourism agency and Underground Railroad Heritage Center have all been lobbying Democrats and Republicans in Albany in hopes of convincing them to consider passing an updated version of 99h.
State Senate Minority Leader Rob Ortt, R-North Tonawanda, supports the idea and has advanced a bill that would ensure all four entities continue to receive dedicated allocations of annual casino revenue once a new compact is in place. A similar bill has been advanced in the Democratic-controlled state assembly by his Republican colleague, state Assemblyman Angelo Morinello, however, the bill still lacks something it would need before it can be approved — a Democratic sponsor.
In a statement from his office, Ortt accused Democrats in the Assembly of “blocking” the proposed legislation.
“I led the fight in the Senate to pass legislation on 99h, ensuring local entities receive their fair share of revenue from the City of Niagara Falls under a new compact agreement,” Ortt said. “Despite the Assembly Majority blocking this critical measure, I’m not backing down. I’ve reintroduced this legislation in the Senate and am working alongside Assemblyman Angelo Morinello to get it across the finish line in the Assembly and deliver the funding our communities deserve.”
In a statement sent to the newspaper in a response to a request for comment from the newspaper, State Assembly Majority Leader Crystal Peoples-Stokes, D-Buffalo, did not endorse the idea of extending 99h.
Instead, she said she is interested in seeing a renegotiation of the gaming compact between New York state and the Seneca Nation and that she hopes with a new compact in place Restaino and the city council will “have the ability to make decisions, for themselves, on how those are used.”
Restaino said he has offered, in talks with representatives from the entities that previously benefited from casino revenue, to assist them in advocating for direct allotments based on their needs and contributions to the community.
“What I’ve said to them is what they need to do is they need to advocate for their interests relative to what they provide in the relationship even as it relates to the Seneca Casino being within the community,” he said.
“There’s an argument to be made by all of them,” he added.
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