Significant tax increase could hurt development, business owners say

Posted at 6:48 PM, Oct 31, 2017

A 14 percent increase in property taxes is on the table in Niagara Falls. The rate would be applied to business and commercial properties and some Falls business owners think it could hurt recent momentum in economic development for the city.

Mayor Paul Dyster's 2018 budget proposals include a 14 percent tax hike for businesses and a 2.6 percent increase for homeowners. This would add $2.3 million in revenue for the city, according to the mayor, and is a necessary change with no casino revenue expected in 2018.

"In the interest of fairness, we wanted to raise roughly half of that from homestead, residential payers, and roughly half of it from the non-homestead or commercial and business payers," Dyster said.

The different rate increases for business and homes were calculated to ensure both sides evenly share the additional $2.3 million burden, according to Dyster.

Craig Avery is a developer in Niagara Falls. He owns several mixed use buildings in the city with Erdco Development.

"We've been encouraged with the increased attention to Niagara Falls," Avery said. "Many new businesses have started recently in the last year or two."

Avery just opened a new business himself called Ion Yoga on Third Street. But he wonders whether this growth can continue with a double digit increase in commercial taxes.

"Businesses, such as my own, that are struggling to make the move--we see the opportunities coming," he said. "But taking another little step back, they're going to have more expenses and taxes."

At Capitol Cleaners on Main Street, Russ Petrozzi feels much the same. He owns the business and also serves on the city's school board.

"What message do you get when your tax rate is going to go up 15 percent?" he asked.  "Why would you want to come here?"

"This state is so business unfriendly, it's just getting to the point where--another 14% here another dollar there--it's becoming unbearable," Petrozzi said.

The City Council is now tasked with reviewing Mayor Dyster's proposals and voting on any possible amendments to the plan.