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A veteran Democratic assemblyman is facing a political novice with a familiar name in a contest generating considerable interest and spending in Niagara County's 138th Assembly District. Observers say it could go either way.

Joseph T. Pillittere, D-Lewiston, 64, with 18 years in office, is seeking a 10th term.

Robert A. Daly, 35, his Republican challenger, is the son of state Transportation Commissioner John B. Daly, state senator from Niagara County for 16 years.

From 1978 to 1994, in spite of different party affiliations, Joe Pillittere and John Daly collaborated on Niagara County concerns in Albany.

Rob Daly grew up in Lewiston, graduated from Lewiston-Porter High School and Niagara University, and is a sales representative for an office supply company, Staples Business Advantage.

Pillittere has shown plenty of staying power in his long tenure, but reapportionment in 1991 made his district less safe for the Democrats, adding the heavily Republican towns of Newfane and Hartland. The district also includes Niagara Falls and the towns of Niagara, Lewiston, Porter, Cambria and Wilson.

In 1994, his winning margin dipped to 1.5 percent over Albert T. Joseph, a relatively unknown Niagara Falls businessman.

Pillittere says many Democrats stayed home that election day. An unpopular Gov. Mario Cuomo failed to carry Niagara Falls, a traditionally Democratic and Italian-American city, in his unsuccessful re-election bid.

This year Rob Daly is the nominee of five minor parties. Pillittere has only the Democratic line.

Both campaigns are well-financed. The GOP State Committee has sent mailings criticizing Pillittere with the type of overstatement voters have come to expect. Pillittere has received funds from the Democratic Assembly Campaign Committee.

The district's voter affiliation: 30,056 Democratic; 22,521 Republican; 2,245 minor parties; 8,086 unaffiliated.

The economy is the main issue, the two candidates agree.

"Between 1983 and 1994 the state lost a million jobs. We have a lot of taxes in this state and they are overburdening," Daly said, predicting that lower taxes will stimulate business and create jobs.

"There is wasteful spending in Albany," and room for cost-cutting to permit tax cuts, he adds.

Pillittere says Niagara County's economy has improved, with the unemployment rate dropping from 11 percent in 1980 to 6.5 percent in 1995.

"There are some good things happening: Teletech, Nabisco, Cascades, American Ref-Fuel," he says, rattling off names of companies that have expanded in Niagara County. "It's turning around. It takes a while to sink in." He cites his efforts to retain inexpensive hydro power for Western New York industries.

Both candidates are talking about welfare reform. Pillittere says he has been working for years on it, and sponsored legislation enacted to require welfare recipients to be fingerprinted, to work, and to keep their children in school.

Daly says welfare payments must be reduced to the level of neighboring states, but job training and child care must be available for recipients. "We have to get them into the job market."

Pillittere says Niagara Falls needs a gambling casino to compete with the Canadian casino expected to open soon just across the Rainbow Bridge.

Daly favors a gambling casino with conditions: "physically aesthetic, tasteful," a self-contained building without hotel rooms, full-service restaurants or gift shops.

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