Huntington has spent $3.4 million defending against LIPA tax challenges

Huntington Town has spent more than $3.4 million defending itself against tax challenges by LIPA, the town's supervisor said in a letter to residents that adds further grist to the dueling claims about the financial impact of the case. 

The April 12 letter from Huntington Supervisor Chad Lupinacci comes as LIPA’s first trial in the tax case against the town over its assessment of the National Grid-owned Northport power plant moves toward a conclusion this month.

LIPA has argued for a decade the Northport power plant is vastly over-assessed, and has offered a settlement that would lower its taxes by half over a nine-year phase-down, to about $42 million. LIPA is arguing in court this week that the town's plant assessment of $3.4 billion should be closer to $198 million. 

Lupinacci in his letter said loss of the case in court could force residents to pay “well in excess” of $5,000 each in tax refunds to LIPA, as well as “several thousand dollars” each year in new taxes. 

Residents of Northport in recent weeks have been protesting against LIPA’s challenge, saying a ruling against the town, and even LIPA’s proposed settlement, would “devastate” the Northport-East Northport School District and the community.

LIPA has said its proposed t settlement would cost individual households an average of about $13 a month in new taxes, compounding to a cumulative $117 a month by the end of nine years.

That compares with a possible court verdict LIPA said could bring a 30 percent tax increase for school district residents and a $650 million refund that could be owed to LIPA. 

"To some degree it's a ton of money," LIPA chief Tom Falcone said of a potential verdict — compared with a settlement offer with an impact amounting to "a couple of cups of coffee a month." 

But Paul Darrigo, who heads the residents’ group Concerned Citizens Against LIPA, says the settlement figure, due to inflation and other factors, would increase average taxes by more than $2,182 by the end of nine years.

He also said the school district estimates median taxes under LIPA’s proposed settlement would increase from $6,756 to $10,499 annually.

“Real world dollars are certainly a far cry from [LIPA”s] $13 a month” estimate, said Darrigo.

Darrigo said the group plans to rally in coming weeks with citizens in Island Park who also face increased taxes from LIPA’s challenge to the E.F. Barrett power plant.

Brookhaven Town has settled its tax case with LIPA over the Port Jefferson power station. A case involving the demolished Glenwood Landing power station is pending.

In his letter, Lupinacci assured residents the town was devoting "substantial resources and pursuing all avenues,” including mediation, for a “fair” outcome.

The $1.1 million the town has spent since Lupinacci, a Republican, became supervisor in January 2018 represents a third of the town’s legal budget, he wrote. Two law firms specializing in tax challenges are joined by an energy expert in analyzing and fighting the case, Lupinacci said.

Huntington also is “aggressively” pressing its case with state lawmakers and Gov. Andrew M. Cuomo, “who has the power to resolve this matter,” Lupinacci wrote.

The State Legislature has yet to pass a bill that would amend the LIPA Act to make LIPA trustees elected officials. Most are appointed by the governor.

The Legislature also has not passed separate bills that would provide funding to soften the blow of an adverse court case or settlement.

Lupinacci said while mediation hasn't yet changed LIPA’s offer to “one I’m comfortable with," he remains "committed to the process” of working out a settlement.

Huntington has appealed a separate case it lost in state Supreme Court that argued LIPA was bound by promises by former LIPA chairman Richard Kessel never to challenge the taxes.