Property tax exemption sought for private water utility

A Long Island group that has lobbied for lower water bills called Wednesday on state legislators to amend the law and exempt a private water utility in Nassau from paying property taxes, which account for a large chunk of customers’ bills.

The Long Island Clean Air Water and Soil group said New York American Water — the privately owned company based in Merrick that provides water services to about 325,000 residents in Nassau — passed along 100 percent of its property tax burden to ratepayers.

Dave Denenberg, director of the advocacy group, said property tax costs account for 40 percent to 70 percent of New York American Water’s customers’ bills. The tax exemption, he said, would significantly lower water bills.

“This simple amendment should be done before the end of the year because it will reduce our water bills by thousands of dollars in 2018,” Denenberg said.

In recent months, the utility’s customers in Nassau saw their water bills spike after the New York State Public Service Commission, a regulatory body, on May 18 approved its request for a four-year rate increase.

Residents, angry at high water bills, have waged protests against the company, and demanded a public takeover of the private utility to ensure costs are comparable to the much lower amounts in neighboring municipal water districts.

Assemb. Michael Montesano (R-Glen Head) said state law currently exempted private waterworks corporations in New York City from paying property taxes, and he was preparing legislation that would allow the Nassau County Legislature to opt in and exempt the utility from paying property taxes.

Municipal water authorities and water districts don’t have to pay property taxes, and Montesano said his proposal would bring a measure of fairness.

Montesano said about 200 households in his district are serviced by New York American Water.

“I see is as an equal protection under our state constitution,” Montesano said Wednesday. “People are not being treated equally.”

State Sen. Carl Marcellino (R-Syosset) on Wednesday said he liked Montesano’s proposal but needed to see the details. Some of Marcellino’s constituents, including those in Glen Head and the Village of Sea Cliff, have seen their water bills more than double since last year.

“Conceptually it’s not a bad idea,” Marcellino said. “I’ve got to see the wording and see how it impacts everyone else. We’re not just in the business of shifting taxes around.”

Montesano said he planned to introduce legislation in January when lawmakers returned to work. If his bill passes the State Legislature and Gov. Andrew M. Cuomo signs it, the Nassau County Legislature must pass its own law to opt in.

“It’s incumbent on Nassau to take action,” Montesano said.

The Nassau Legislature’s Minority Leader Kevan Abrahams (D-Freeport) said in a statement that he and his caucus would “most likely” opt in.

Presiding Officer Norma Gonsalves (R-East Meadow) did not return calls for comments.

Carmen Tierno, president of New York American Water, said if the company did not have to pay property taxes, it would stop passing those costs along to ratepayers.