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LIPA offer to settle Northport plant tax grievance a 'starting point,' says town

The Town of Huntington has labeled as a "starting point" the Long Island Power Authority's recent offer to settle a tax-grievance case over the assessment of the Northport power plant.

In a statement to Newsday and at a recent board meeting, Huntington Supervisor Frank Petrone suggested the town intended to negotiate a better offer than the one on the table.

"The town has analyzed the letter LIPA sent containing its settlement offer and is writing back asking for further explanation of the proposal to address inconsistencies we identified," he said. "We hope to meet with LIPA in the near future to discuss the offer, which, as we have said, we view as a starting point in the negotiations."

In a June 20 letter to Huntington Town, LIPA offered to forgive past amounts it says are owed because of a 90 percent overassessment of the plant, and to start a 10-year, 10-percent annual reduction of the $74.4 million LIPA currently pays in annual taxes for the plant. For Huntington and the Northport-East Northport school district, that means the tax amount will drop by roughly $4 million annually, starting in 2015, to around $30.8 million by 2025, according to a copy of the letter shown to Newsday.

Petrone, in criticizing the plan while it was being negotiated in Albany during passage of the LIPA reform act last month, said it would hit local taxpayers with double-digit increases.

A spokesman for Gov. Andrew M. Cuomo, whose administration brokered the proposed settlement, said the letter speaks for itself. The letter does not mention alternative offers, and gives taxing districts four months to enter into binding agreements to the settlements.

If they don't, LIPA said it would proceed with the tax challenges already in the courts. If LIPA wins those challenges. it would result in a significantly higher bill for taxpayers, including retroactive payments for the past taxes paid based on the overassessment.

During a July 9 town board meeting, Petrone said the town has communicated its willingness to settle to state governments and LIPA.

"They know we certainly are willing and able and ready to settle and to work on this, but they also know that we have a responsibility not to just accept what LIPA, National Grid or [PSEG] at this time puts before us," he said.

The town would like to see the plant overhauled to increase its value, Petrone said, thereby holding the line on taxes.

LIPA, in its letter, noted that Northport and the other National Grid-owned plants are "overassessed and have been depreciating in value over the last four to seven decades; are near or at the end of their useful lives; and have not operated as frequently or as efficiently as they once did."

With Deborah Morris

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