SALAMANCA, N.Y. — The Seneca Nation of Indians plans to make its last payment to New York state on April 1 under the 2002 Seneca Gaming Compact, representing the last quarter of 2016.
Over the past 14 years, the Seneca Nation has shared more than $1.4 billion with the state, which in turn shared $368 million to host communities in Salamanca, Niagara Falls and Buffalo.
The compact was for an initial 14 years plus an additional seven years if neither state nor Seneca officials objected. Since there were no objections recorded from either the state or Seneca Nation, the compact is extended for another seven years through 2023.
According to the Seneca Nation, however, there are no provisions in the seven-year extension to continue sharing slot machine revenue with the state.
Seneca Nation President Todd Gates signaled the end of the payments to the state at his State of the Nation address on Saturday.
“The Seneca Nation has followed the terms of our gaming compact since 2002 and we will continue to do so until it expires in 2023,” said Gates in a statement to the Times Herald on Wednesday. “As written in the compact, the Nation provided a share of our revenue to the state through the end of last year.
“Although the revenue share has ended, we remain committed to being good neighbors in the communities where we have gaming facilities and we look forward to working directly with them to continue the economic progress of Western New York.
“Since 2002, the Seneca Nation has contributed more than $1 billion to state and local governments,” Gates continued. “In addition, the Nation has created thousands of jobs, drove another $1 billion in private investment and created transformational economic opportunities for the local construction trades and our many local business partners.”
Salamanca Mayor Michael Smith, who attended Saturday’s State of the Nation address on the Cattaraugus Territory, said Gates and Seneca Treasurer Maurice John informed him of plans to discontinue state payments under the compact.
“They told me not to panic, that they would continue to support their host communities, and I believe that,” Smith told the Times Herald in an interview Wednesday after Gates issued his statement.
The city of Salamanca was expecting to receive about $5.9 million this year, according to Smith. That is more than half of the city’s $10 million budget, he added.
Eight years ago, when the Seneca Nation withheld casino payments from the state under the compact, the city was forced to lay off 50 employees. That standoff lasted nearly three years before the issue was settled and the local share was restored.
The Senecas objected to the state’s expansion of casino gaming to racetracks in its exclusive area west of Route 15. The dispute was settled in 2013 when the state admitted that, under the compact, it had wrongfully promoted casinos at the Hamburg, Batavia and Canandaigua racetracks and allowed the Senecas to keep $200 million of what they would have shared with the state. The host communities all received their share of the net drop from slot machines from the state.
Smith said the city has put away money in a “rainy day fund we can keep the city alive with” for up to two years with prudent spending.
“We will fare better than the last time,” said Smith, who was a member of the Common Council at that time. “From the city’s standpoint, we are not panicking. There are a lot of positive things that are happening and we are not going to let this derail that progress.”
The mayor added, “I firmly believe (the Senecas) will continue to support the host communities. They need our services.”
The Salamanca City Central School District and Cattaraugus County also receive a share of the local casino revenue. Both use the funds to make up for the loss of property tax revenue when properties in the city that are on the Allegany Territory are purchased by enrolled Seneca Nation members, who are exempt from taxation.
County Administrator Jack Searles said the county has budgeted nearly $1.274 million from casino revenues for 2017. That is the amount of county taxes lost in Salamanca from property owned by an enrolled member of the Seneca Nation.
Searles said he was not aware of any plans by the Seneca Nation to end payments to the state, which are shared with host communities.
“Any dispute between the state and the Seneca Nation is supposed to go to arbitration,” he added.
Smith said the Senecas started talking about the compact back in December, and department heads were told in January to be prepared in the event casino funds were again interrupted.
Gov. Andrew Cuomo’s press office in Albany referred questions about the compact the the State Gaming Commission. A call seeking comment on the Senecas’ position on the compact regarding sharing revenue with the state was not returned Wednesday afternoon.
State Sen. Catharine Young, R-Olean, said in a statement to the Times Herald, “I have personally spoken with President Gates and he has assured me that the funding to the host communities will continue. I expressed that it would be crucial that the school, city and county receive the same amount they have been receiving without any reductions, and the funding would not have additional restrictions placed on how it could be spent, because each entity knows best what its own needs are.”
Young expressed concern that “the loss of $100 million of casino revenues to the state could have a detrimental impact on school funding statewide, including schools in my Senate district.”
U.S. Rep. Tom Reed, R-Corning, said, “We care about making sure local communities, including Salamanca, are addressed as the Seneca Nation continues its discussions with New York state. … I appreciate working with President Gates of the Seneca Nation as we find a way to make sure this issue is resolved with the best outcome for residents of the region while the rights of the nation are respected.”
