Island Park residents would pay more than $9,800 in additional taxes over seven years as a result of LIPA's tax settlement deal with Nassau County, officials said at a public meeting in the district Wednesday night that drew hundreds of sometimes-angry residents.
LIPA and Nassau County held the public meeting in Island Park Junior High School to detail the particulars of the proposed settlement of a tax case over the E.F Barrett power plant that will reduce the taxes LIPA pays by 50% over seven years.
The settlement, which still needs to be approved by the Nassau Legislature, would cut in half the $43 million LIPA pays annually on the 1950s-era National Grid-owned plant, in increments over the phase-down period. The two entities also agreed on an option to keep the tax payments at their lowest level for four years after the agreement expired in 2027. Citizens advisory groups will be formed to explore future options for the plant.
The deal would primarily effect about 2,200 homeowners in the Island Park School district.
Under the deal, LIPA’s share of taxes to the school district would drop from $21.8 million in 2021 to $13.9 million in 2027. The seven-year cost for the average homeowner in the Island Park district would be $9,382. The $24 monthly impact for the average homeowner in the 2021-22 school year would jump to $203 a month by the 2026-27 school year.
“We certainly realize $200 a month is a lot of money,” LIPA chief Tom Falcone told groaning homeowners when the costs were released. But he added that if “we try the case the outcome would be substantially worse” for homeowners.
Island Park resident Richard Schurin drew applause from the sometimes raucous crowd when he accused LIPA of “violating that social contract” not to challenge the taxes while residents were enduring impacts of the plant, which he called “an eyesore” and “the most polluting plant on Long Island.”
Another resident, Stu Klein, said the settlement puts the village's "budget in jeopardy."
"How do we attract new residents into this community? How do we keep old residents in this community?” Klein said.
Resident Selene Castrovilla told LIPA officials Island Park was just getting over the devastating impacts of superstorm Sandy. “There’s no empathy for people whose lives were destroyed,” she said. “You’re treating us like a piece of garbage.”
Residents also booed two union officials who attempted to speak in favor of the agreements, including Ron Bauer, business manager of Local 1049 of the International Brotherhood of Electrical Workers. He called the agreement “fair and reasonable.” Residents caccused him of being a LIPA “plant.”
Nassau County Executive Laura Curran opened the meeting by saying there was "no ideal outcome" to the tax challenge filed by LIPA, but said the settlement was necessary to avert "immediate, devastating tax hikes" should Nassau lose the tax challenge. And "we were not confident we would do well in this case," Curran said. LIPA has said the plant and older units across Long Island are vastly over-assessed and underused.
Nassau also reached a similar agreement to reduce the taxes LIPA pays for a Glenwood Landing that no longer hosts a large power plant, but does have smaller power generators.
Business groups and unions have largely applauded LIPA’s tax efforts, expecting that it will keep unionized employees working at the plants and help to reduce or at least stabilize rates, because tax reductions can translate into lower power supply charges for customers.
What remains to be seen is whether the agreement will prompt Huntington Town to reach a settlement with LIPA. The town was the first to be challenged in court over the value of the Northport Power station, for which LIPA pays annual taxes of just over $81 million. It’s a figure LIPA wants to reduce by half over the next seven years. LIPA's Falcone said Wednesday the utility has had two productive mediation sessions with the town in recent weeks.
But a verdict in the case is expected in the coming weeks or months. And if the town loses, residents could face hundreds of millions of dollars in tax refunds for LIPA and substantially lower tax payments. The town could appeal any such verdict.
Like most of the old National Grid power plants, the E.F. Barrett plant in Island Park runs at only around 25% capacity, producing just 7% of Long Island’s energy, LIPA said. Usage had declined by 50% since 1999, and the plant is a third less efficient than newer plants such as Caithness in Yaphank. Taxes make up the bulk of the plants cost to operate, LIPA said.
LIPA estimated the $43 million it pays for the plant taxes this year, left unchecked, would balloon to $54 million by 2030, though it believes fair taxes would be just $4 million to $6 million a year.
LIPA’s deal waves the $170 million to $400 million it believes it is owed in tax refunds for the plant.
LIPA would still pay about $80 million to the Island Park school district in taxes over the seven years of the agreement.