Treasurer defends his actions concerning casino

Date: 12/26/2012

By G. Michael Dobbs

news@thereminder.com

HOLYOKE — The principals of the company that wanted to build a casino at Wyckoff Country Club have asserted that Holyoke taxpayers could have seen a 40 percent decrease in their property tax bills with a casino on the tax rolls, but Treasurer Jon Lumbra has strongly disagreed.

Lumbra explained Reminder Publications there are too many variations and too few details about the final project to project the impact on the city's tax rate.

In a written statement, Anthony Ravosa Jr. of Paper City Development Company, LLC said that in an August 2011 meeting, Lumbra was "emphatic in his view that a Holyoke casino could mean upwards of a 40 percent reduction in property taxes for the city's residential homeowners — something that he has refused to state publicly."

Ravosa added, "With calculator in hand at that meeting, Treasurer Lumbra projected annual property taxes on a Holyoke resort casino to be $17.5 million, with the facility being taxed at the then-current commercial rate. That figure was later released by Paper City Development to the news media citing the city treasurer as the source. Treasurer Lumbra was ardent in his view that tax revenues generated from a Holyoke casino would represent roughly one-third of the city's entire tax levy, presenting both a vehicle for residential property tax relief and commercial tax rate parity. Further, that when combined with the Holyoke Mall, these two entities would represent approximately 45 percent of the city's entire property tax levy."

Lumbra replied, "While it is true that Mr. Ravosa and I had a private meeting at the request of former Mayor [Elaine] Pluta our memory of certain points discussed differs. Mainly, that I suggested a 40 percent decrease in residential property taxes if a casino was to be placed in Holyoke.

"My recollection is that when asked about the impact on property taxes I stated that, if combined, the revenue from the Holyoke Mall and a $500 million casino could hypothetically absorb 40 percent of the tax levy, leaving 60 percent to be paid by the remaining residential and commercial property owners. This does not equate to a 40 percent reduction in a homeowners tax bill, in fact it is impossible to assume any reduction without first factoring in a budget submitted by the mayor and approved by the council, certifying free cash and setting a CIP [Commercial, Industrial and Property] shift for any given fiscal year. To imply otherwise is misleading," he added.

Lumbra was surprised by the release and said, "I didn't see anything like this coming down the pike."

In a written statement Lumbra further said, "What I find most confusing about this release is the implication that I have withheld information about the potential revenue Holyoke could realize if a casino was placed in the city. Mr. Ravosa himself acknowledges that information I personally provided to him, namely that we could see an additional $17.5 million was included in a release naming me as a source. If my intention were to hide this information for political purposes, why would I have provided this information to him and in turn any recipient of Paper City's press release?

"What has become clear is that this is not about providing the taxpayers of Holyoke with facts to aide in public dialogue; rather it is a personal attack on me and my office. I know Mr. Ravosa and his associates are disappointed, who wouldn't want to do business in Holyoke? However, they city has moved on.

"While I can find fault with much of this release, there is one area where Mr. Ravosa and I are in complete agreement, that it is the duty of my position to 'preserve, protect and manage the financial resources of the city.' This is something that I take seriously and have been committed to since day one," he added.

Lumbra also disagreed with charges made by Ravosa that he had not informed the City Council about the tax impact of a casino.

A casino, Lumbra said, would have at the earliest been on the tax rolls for either 2016 or 2017 fiscal years.

"Who knows what's going to happen?" he asked.

He said he knows there will be a $1.6 million budget gap in the next fiscal year in Holyoke and a projected $1.8 million gap for the following year.

What would help the city immediately would be if the City Council approved a local meals tax, Lumbra said. The Department of Revenue has shown that Holyoke is passing up $500,000 a year in revenue from such a tax. The council has had the legislation before them for the past two years for the local meals tax but not acted upon it.

Ravosa said that Lumbra's actions are a reflection of his political support of Mayor Alex Morse.

"There are serious questions as to why Treasurer Lumbra has consistently snubbed his nose at the City Council in their logical, reasonable and numerous requests for this information. He has refused to come clean with Holyoke taxpayers regarding the potential impact of a resort casino developed in Holyoke on residential tax bills. One can only speculate on his rationale, but, at this juncture, we can only assume it to be purely political. It's no secret in Holyoke where Mr. Lumbra stood in the last mayoral election. It was clear that he had absolutely no interest in shedding any positive light on this issue that would reflect favorably on the then-incumbent mayor. "Further, for the entirety of this year and in defiance of two additional City Council orders on this matter — he has still not come clean with the residents given his allegiance to the current mayor and his desire to suppress public enthusiasm for this transformative project for Holyoke," he charged.

Lumbra disputed that claim by saying, "Any project whether it's $1 million or $500,000 needs to be looked at fully."

He cited a casino, a retail development or the Mt. Tom Power Plant going offline.

He understands the casino issue is "touchy" and "sets off emotions," and added, "as city treasurer I don't set policy and I don't want to comment on a casino."

Lumbra added, "I handle the numbers."

As a Ward 7 resident, he said he doesn't know how he or his wife would have voted in a referendum about a casino proposal.