Editorial: Town of Huntington plays a risky game with LIPA
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Last year, the Northport-East Northport School District had a budget of about $150 million, and $50 million of that came from property taxes on the massive power generating station in Northport. About $3 million of Northport's $9-million library budget did, too. It's not surprising then that residents and their elected officials vehemently oppose anything that would decrease that revenue, a key part of the new law restructuring the Long Island Power Authority.
LIPA ratepayers have subsidized the smaller tax bills of residents living near plants with jacked-up rates for all. That's part of the reason none of the $7-billion debt from the Shoreham nuclear plant has been paid, and LIPA rates are among the highest in the nation.
Every community that's lived off the largesse of LIPA for the past 15 years faces a challenge, but none compares with the reverberations being weighed by the taxpayers in Northport and East Northport and the politicans in the Town of Huntington. In response, Huntington Supervisor Frank Petrone has bristled and objected, which makes more sense politically than mathematically.
The deal offered by Gov. Andrew M. Cuomo lays out a 10-year step-down of the taxes on four plants to a still-generous 40 percent of the current, bloated total. It's a good offer, and there isn't a lot of wiggle room on it. The risk for communities that fight LIPA's reassessment demands in court, rather than taking Cuomo's offer, is enormous. School districts and municipalities that get bad news from the courts could lose a lot more and lose it all at once, rather than gradually over a decade. And the four months Cuomo has given communities that host the plants in Island Park, Glenwood Landing and Port Jefferson, as well as Northport, to mull it over is more than enough, even if the late-October deadline and its proximity to the local November elections is giving some politicians fits.
Petrone's heartburn is the hottest. He wants the state's plan to be a starting point rather than a final offer. But the starting point for an agreement was actually harder on the municipalities in terms of the time frame and size of the payment reductions, and this offer came only after heated negotiation by the state senators trying to protect Northport and Port Jefferson. Petrone, up for re-election, is demanding more time, but other than getting the decision point past Election Day, why is that necessary? And Brookhaven, where the Port Jefferson power station pays about $30 million a year to the school district and others, is going to accept Cuomo's offer with, at most, a bit of wriggling, according to officials involved in negotiations.
The 1998 contract between National Grid, which owns the plants, and LIPA, which purchases the power, appears to state that LIPA and Grid wouldn't challenge the assessments. But that agreement expired on May 28. The new power supply agreement says no such thing.
The offer to bring these tax bills down over 10 years rather than immediately, is more than fair, and should free up money to let LIPA pay off debt, which in turn could lead to more competitive rates. The potential for modernizing these plants, too, gives communities a shot to rebuild their tax bases over time. But Petrone, in balking at a fair offer, is putting his constituents at risk of brutal, court-imposed tax increases. And more and more, he's doing so alone.