Bill seeks to limit impact of reductions in taxes paid by LIPA

LIPA argues four National Grid-owned power plants, including this one in Northport, are grossly overassessed. Credit: Newsday / Thomas A. Ferrara
Two senior state senators from Long Island are introducing a bill that would lengthen the time for the reduction of taxes paid by LIPA on power plants, while providing a fund to limit the impact on local communities.
The bill, by Senate Majority Leader John Flanagan (R-East Northport) and state Sen. Kenneth LaValle (R-Port Jefferson), was in the final drafting stages Thursday afternoon, Senate aides said. It’s expected to be introduced on Friday.
It comes as LIPA nears the settlement of one plant’s taxes with Brookhaven Town while another case with Huntington Town is set to go to trial. LIPA argues the four National Grid-owned power plants — in Northport, Port Jefferson, Island Park and Glenwood Landing — are grossly overassessed and has been challenging the taxes in legal filings.
LIPA in settlement discussions has generally offered to forgive past taxes amounting to hundreds of millions of dollars, while reducing going-forward taxes by around 50 percent over eight years starting in 2019.
The bill would lengthen to 15 years the time for the tax on the plants to ramp down. It would also expand the use of an existing $30 million state power plant cessation mitigation fund — set up by the state to help communities that lose a power plant — to include settlements and judgments arising from the LIPA tax challenges. And it would allow school districts and municipalities to create tax stabilization reserve funds to mitigate the burden, according to a draft read to Newsday.
“You need an appropriate phase-down period to allow the community to adjust to a new reality,” LaValle said at an event in Jamesport Thursday.
The move comes as one community appears to be hardening its stance against tax reductions. Northport-East Northport school district Superintendent Robert Banzer on April 16 released a letter citing the “promise made by then Governor George Pataki and LIPA . . . not to lower the assessed valuation of the Northport Power Plant as long as the taxing authorities did not abusively increase the assessment.” He invited taxpayers to a community forum on the topic at the Northport-East Northport High School on May 1 at 7 p.m. Banzer couldn’t be reached Thursday.
Any reduction would force the district “to make additional modifications, including cutting school programs and staffing significantly,” he wrote.
A state Supreme Court judge has set June 11 as the start date for a trial on LIPA’s tax challenge to the more than $80 million LIPA pays in taxes to Huntington Town for the Northport plant. Meanwhile, Brookhaven Town earlier this month announced an agreement in principle for a settlement on the $32.4 million in taxes LIPA pays for the Port Jefferson plant.
The senators’ bill would need an Assembly sponsor and have to be passed by both houses of the State Legislature and signed by Gov. Andrew Cuomo. Spokespersons for Cuomo and the Assembly didn’t respond to requests for comment. A LIPA spokesman said the utility won’t comment on pending legislation.

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