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Falls urged to do away with dual tax system ; Chamber also prods state on gas drilling

The Niagara USA Chamber called Monday for the City of Niagara Falls to do away with its two-tiered tax system and urged the state to take an open-minded look at natural gas drilling in the Marcellus Shale.

The Chamber issued its annual legislative agenda Monday, something normally done at a reception for local and state politicians. No reception is being held this year, said Kory M. Schuler, the Chamber's director of government affairs.

Schuler said in an interview that he believes that Niagara Falls' practice of charging a higher tax rate for commercial property over residential is a factor in the city's economic struggles.

"It's a lopsided way of doing taxes. You have a large amount of derelict commercial property," Schuler said. "It's certainly not an incentive."

This year's city tax rates are $17.59 per $1,000 of assessed valuation for homestead property and $31.58 for commercial, or nonhomestead.

"We've tried to move toward equalization over time. We're not there yet," Mayor Paul A. Dyster said.

Of the nonhomestead rate, he said, "It's less than double. It used to be double-plus."

For 2011, the city raised tax rates by 46 cents per $1,000 for homes and $1.01 per $1,000 for business property.

The city's goal, Dyster said, is to move the commercial rate 10 percent closer to the residential rate each year. But he acknowledged, "It's easier in a good budget year."

Except for the Niagara Wheatfield School District, the city is the only taxing entity in the county with a two-tiered system. Niagara Falls school taxes are uniform at $18.81 per $1,000, according to the county real property tax office.

On the controversial topic of gas drilling in the Marcellus Shale, the Chamber didn't endorse or oppose it, but called for "a careful review of the benefits and risks of such drilling."

"It would contribute $32 million in tax revenue and a lot of jobs. It has to be looked at," Schuler said. "That doesn't mean we'll support it in the end."

Schuler acknowledged worries over whether the method used to extract the gas might pollute drinking water in eastern New York.

"We have to make sure we study all that in depth," he said. "One thing we want to stress is education on issues. A lot of times people support or oppose something just on the face of it."

The Chamber's official stance is to "oppose legislation or artificial deadlines imposed to stall this process in order to please special-interest groups, while supporting thoughtful legislation created to move this process forward."

The Chamber's eight-page document also expressed support for Gov. Andrew M. Cuomo's proposed property tax cap and called for a regional economic-development fund to be created by the New York Power Authority with proceeds of the sale of unallocated expansion and replacement power from the Niagara Power Project.

The Niagara USA Chamber also endorsed the UB 2020 proposal, which is stalled in Albany, and more "reasonable" wetlands regulation.

It cheered the proposed Verizon data center project for Somerset and the redevelopment of the Rainbow Centre mall in downtown Niagara Falls, with the Niagara County Community College culinary arts institute as the anchor.

e-mail: tprohaska@buffnews.com

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