New York government’s settlement of disputes with the Oneida Indian Nation and the St. Regis Mohawk Tribe is a credit positive for counties and municipalities in upstate New York, Moody’s Investors Service said.
The settlements reached earlier this month, which address disputes over gambling exclusivity, gambling revenues, land, sales taxes and property taxes, would result in an additional $15 million in revenues for Oneida County, or about 5% of the county’s budget, according to Moody’s assistant vice president Robert Weber. Madison County would get slot machine revenue of about 4% of its budget and a $11 million one-time payment for taxes that is equivalent to 52% of its current general fund reserves level, he said.
New York and the Oneidas have disputes dating back to 1795. The litigation between the tribe, state and the Oneida and Madison counties started in 1970. The settlement, which still requires approval from several bodies, was reached on May 16.
The dispute between the state and the Mohawks goes back three years. The parties reached a preliminary settlement, pending approvals, Tuesday.
“It’s a very positive step going forward,” said Oneida county executive Anthony Picante. “It’s a steady revenue stream. It’s a significant amount of money.”
As part of the Oneida deal Oneida and Madison counties would get annual payments. St. Lawrence and Franklin counties and towns within these counties would get annual payments as part of the Mohawk deal. Both deals would also provide annual payments to the state.
“Being able to move forward will have a cascading effect on my district, from meeting the needs of economic development to infrastructure improvements and a sustainable revenue sharing plan to support it,” said New York assemblyman Ken Blankenbush, who represents affected counties.
The Oneida Indian Nation deal provides financial benefits for Oneida County, Madison County, and the state. Oneida County has an A1 rating from Moody’s on its general obligation debt. As of March Oneida County had $148 million in outstanding debt.
In the agreement the Oneidas will contribute 25% of all slot machine revenue annually to New York, an estimated $50 million. Of this sum, $34 million will go to the state, $12.5 million to Oneida County and $3.5 million to Madison County.
To settle past property tax issues, the Oneidas will also provide $2.5 million annually to Oneida County for the next 19 years. In addition, the Oneidas will give a lump sum payment of $11 million to Madison County.
The Oneidas have also promised to set sale, cigarette and fuel taxes at rates at least as high as those found in the surrounding state.
For its part, the Oneidas would gain exclusive rights to casino gaming in a 10 county region of central New York. New York and Oneida and Madison Counties would drop legal claims to the Oneida Nation’s land.
In their deal the Mohawks have agreed to pay $30 million to New York, from which $3.75 million would be handed over to both St. Lawrence and Franklin counties.
Additionally, the Mohawks would provide about $2.8 million annually to each county from casino revenue. The counties would give half of what they received to their towns. Moody’s predicts that the counties’ share would amount to about 0.8% of St. Lawrence County’s revenues and 1.6% of Franklin County’s revenues.
The Mohawks would gain exclusive rights to casino gaming in eight counties in North Country New York.
Moody’s rates St. Lawrence County’s lease revenue debt Baa1 with a negative outlook. It had $6 million in outstanding debt as of November 2012.
