A proposed legislative resolution sought by Suffolk Comptroller John Kennedy would direct the county attorney to assess the viability of legal action against the Long Island Power Authority for failing to pay $6.6 million in property taxes.
The measure, filed by presiding officer DuWayne Gregory (D-Copiague) on Monday, would require County Attorney Dennis Brown to report within 90 days on whether the county should “commence an action against LIPA . . . compelling the payment of unpaid principal as well as interest and penalties” for property taxes and payment in lieu of taxes.
Kennedy said LIPA made only partial tax payments on 800 properties in Suffolk in 2014-15 and 730 parcels in 2015-16. He said he expects similar numbers when property taxes are due at the end of this month.
LIPA, which owns power generating facilities, has ordered PSEG Long Island, which runs utility operations, to cap property tax increases to two percent a year as permitted under the state LIPA Reform Act of 2013.
Don Leistman, a special counsel for LIPA on the tax issue, said LIPA’s actions are legal and rely “on the clear and incontrovertible language of the LIPA Reform Act.”
Property tax collection in Suffolk is governed by the nearly century-old Suffolk County Tax Act. Under the law, towns, schools and other taxing jurisdictions take their share of tax proceeds upfront, leaving the county to cover delinquencies. However, towns and other jurisdictions are impacted later. The tax act also permits the county to seize business properties that have failed to pay property taxes after a single year.
Kennedy said he has asked that the review determine “the full extent of my authority” to seize delinquent utility properties, if necessary.
“This is a huge step forward in getting it before a court of law,” said Brookhaven Supervisor Edward Romaine, who first raised the issue in 2015, but had concerns about the town’s legal standing to sue. “The corporation is misconstruing the intent of the law and unilaterally not paying their taxes.” Romaine estimated the loss for Brookhaven alone at $1 million.
In Nassau County, towns in 2015 initially refused to take partial tax payment from PSEG, creating a $30 million budget. Later, the county legislature voted to accept a payment that was $1.4 million less than the $30.4 million the county had billed. Leistman said lawsuits with Hempstead Town and numerous Nassau school districts were settled last fall without LIPA making further payments.
Jason Elan, spokesman for Suffolk County Executive Steve Bellone, said the administration was unaware of the proposed LIPA resolution: “This is the first we are seeing the resolution and it is under review.”
Kennedy has asked Brown to consider using attorney Harvey Besunder, a former Suffolk County Bar Association president and an expert on tax law, to handle possible legal action against LIPA. “I want the best and brightest minds to determine if LIPA should be paying all its taxes like everyone else,” said Kennedy.