All three Nassau towns rejected PSEG's second-half payment of their general property tax bills last month, leaving the county more than $30 million short in revenue -- at least temporarily, officials said.
Tax receivers for the towns of Hempstead, Oyster Bay and North Hempstead said last week that they were forced to reject PSEG's property tax payments, due Aug. 10, because the power company sent in nearly $1.372 million less than the $30.357 million billed. Nassau County law prohibits partial payment of property taxes.
When PSEG did not return a corrected payment, along with a 2 percent penalty, by Aug. 31, the receivers withheld the $30 million in tax revenue due Nassau because the collection of overdue bills after that date is up to the county treasurer, town officials said.
The administration of Nassau County Executive Edward Mangano says it will accept PSEG's lower payment for the general tax bill, which in Nassau is mailed in January to collect property taxes owed towns, special districts and the county. It is separate from the school tax bill, which goes out in October.
The dispute over power company taxes first arose on Long Island in June when Suffolk town officials complained that PSEG, under direction of the Long Island Power Authority, sent a combined $2 million less than the towns had billed.
LIPA, which still owns power facilities operated by PSEG, had directed PSEG to limit tax-bill increases to 2 percent because its lawyers said the state-approved LIPA Reform Act of 2013 caps tax hikes to 2 percent annually on company properties effective last January.
PSEG "had sent a cover letter with the payment saying they were not going to pay anything over 2 percent," said Oyster Bay tax receiver James Stefanich. "That's all fine and well, but that's not what I'm charged to do. I'm charged to collect the amount in the tax warrant," which is the legal document approved by the county legislature setting tax rates and assessments in each town.
Some officials said LIPA's policy will force taxpayers and homeowners to make up the difference. "Now residents are getting two shocks from their electric company: a rate increase and a company that doesn't want to pay its fair share of taxes. When they don't pay their fair share of taxes, who picks up the difference? All my neighbors," said Hempstead Town tax receiver Donald Clavin, adding "You have to pay what you're billed. This isn't Priceline.com. You don't get to choose what you want to pay."
LIPA spokesman Sid Nathan did not respond to Clavin's comments. Nathan said LIPA is following the law.
Acting assessor James Davis said he will ask the county legislature at its meeting Wednesday or Sept. 21 to correct the amount of taxes owed by PSEG throughout the county to the lesser amount of $28.975 million. If the legislature approves the correction, he said, he expects PSEG will then send the county a check. The county treasurer will determine whether any penalties apply, county officials added.
A spokeswoman said the legislature's Presiding Officer, Norma Gonsalves (R-East Meadow), is looking into the issue and will ask the county attorney to review the legislation.
County comptroller George Maragos also said he would like an opinion from the county attorney. "If there is any doubt and the county attorney feels that we have a strong case, I would like to see them take legal action to collect" the difference, he added.
Minority leader Kevan Abrahams (D-Freeport) said, "If our average homeowner did this, there would be a lien on their home, yet County Executive Mangano is letting those same homeowners take it on the chin to the tune of $1.3 million while giving special treatment to PSEG. It's just unfair."With Mark Harrington