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Bill would block LIPA from collecting back taxes in tax challenges 

LIPA is challenging the taxes levied by Huntington

LIPA is challenging the taxes levied by Huntington Town on the National Grid-owned Northport power plant. Credit: Newsday / John Paraskevas

The State Senate has passed a bill that would prevent LIPA from collecting hundreds of millions of dollars of past taxes resulting from successful power-plant tax court challenges.

Sen. James Gaughran (D-Northport) sponsored the bill to “limit the remedies available to LIPA when bringing tax certiorari challenges by prohibiting relief in the form of repayment of all or part of the taxes assessed against any power plant, transmission line or substation from a prior year,” according to the Senate bill.

Gaughran accused LIPA of using the “threat of collecting back taxes on its power plants to bully communities into silence and to persuade local government officials into settling these lawsuits.” He said the bill would protect the potentially dozens of other communities that face LIPA tax challenges for other properties, such as substations and transmission lines. LIPA pays $84 million a year in taxes for the Northport plant. 

LIPA, in a statement from a senior official, said Gaughran's bill would set a "dangerous precedent that will lead to higher energy bills for 3 million Long Islanders."

"This bill allows assessors the freedom to overassess electric utility property and send their tax bill to neighboring communities without penalty," LIPA said. 

The bill passed unanimously, with the backing of Senate Minority Leader John Flanagan (R-East Northport) and awaits passage in the Assembly. It also must win Gov. Andrew M. Cuomo’s signature. Cuomo appointees who control the LIPA board have supported the authority’s tax challenges.

Anger over LIPA’s 10-year effort to lower taxes on the Northport power plant spilled into the authority’s board room Wednesday, as residents appealed to trustees to end the case that threatens to “devastate” their community.

Brandy Sandin described as “terrifying” the prospect that her taxes will double and that she’ll have to move her children out of the school district before they finish high school. Sandin described life in the shadow of the four large smoke stacks of the plant, saying family pictures often require cropping to eliminate the eyesore. “We are hosting those stacks,” she said. “They are terrifying.”

David Stein, a member of the Northport-East Northport School Board, took LIPA Chief Executive Tom Falcone to task for repeated references to the power plant’s $84 million annual taxes as higher than those of Disneyland and the Empire State Building.

“Shame on you for making that  reference," Stein said. “Shame on some of the trustees for allowing that and for your antagonistic, snarky and threatening email responses to some of us.”

Two speakers, Neal Lewis of the Sustainability Institute of Molloy College, and Ronald Bauer, business manager of Local 1049 of the International Brotherhood of Electrical Workers, spoke in favor of LIPA’s proposed settlement, which would cut plant taxes in half over nine years. LIPA has said the impact on average Northport taxpayers is between $13 and $15 a month, figures that critics dispute.

Falcone pointed to the ongoing court case as the “forum for everyone to get a fair result,” and he reiterated LIPA’s claim that the plant is “severely overassessed” by the town at $3.4 billion. LIPA estimates the assessment at closer to $198 million.

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