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LIPA rejects request by Northport school district, Huntington to delay tax case

The LIPA Power Plant in Northport on July

The LIPA Power Plant in Northport on July 1, 2019. Credit: Newsday / John Keating

Huntington town and the Northport school district have cited budget woes tied to the coronavirus pandemic in asking LIPA to forego its multimillion-dollar tax challenge of the Northport power plant’ property tax for more than two years.

LIPA on Wednesday politely declined the offer.

In a series of letters over the past two days, lawyers for the Northport-East Northport School District and Huntington town detailed the extensive damage the coronavirus pandemic has and will do to school and government budgets. They proposed deferring LIPA’s tax challenge of the Northport power plant taxes until June 2022.

“There is already serious concern that people will be unable to pay their taxes as a result of this devastating crisis,” John Gross, a lawyer for the district at the firm Ingerman Smith, wrote to LIPA on April 22. “I am sure you would agree that it would be unconscionable for the Long Island Power Authority to ignore its responsibility to avoid devastating an entire community, its school district and town by ‘doubling the devastation of COVID-19 with a massive shift in tax increases to the residents of the” district and town.

Reached Thursday, Gross added, " … basic decency requires that this litigation be paused until finances can recover. It is truly unfortunate that LIPA’s obsession with raising taxes for residents and businesses in Northport has blinded them to that simple truth." 

LIPA, which says the National Grid-owned Northport Power Station is grossly over-assessed, has offered to settle the tax challenge by reducing the $86 million it pays in taxes each year, over an eight-year period. Newsday has reported that a more recent offer has been proffered, but talks stalled when the coronavirus hit last month.

Port Jefferson has already settled a tax challenge over the power plant in Port Jefferson, and Nassau County is awaiting county legislative approval for a tentative settlement of tax challenges for the Glenwood Landing and Island Park power stations.

LIPA declined to comment but in responding to Huntington and Northport, “respectfully” declined to delay the tax case and settlement talks.

“The town’s excessive tax bills place a burden on all Long Islanders through their electric bills, including your neighboring towns and school districts, who are facing similar challenges,” lawyers for LIPA wrote. “LIPA’s responsibility to all Long Island families, businesses, towns, and school districts means that it cannot agree to continue to overpay taxes for an additional two years to subsidize your Town and School District. Based on past actions, it is likely that any further delay will be followed by requests for additional delays and continued litigation.”

The town and district letters asked that LIPA enter a joint stipulation agreement to be filed with the court seeking the delay. LIPA’s refusal could mean the town will request a state Supreme Court judge overseeing the case to decide on the request.

Nicholas Ciappetta, Huntington town attorney, said, “We are reviewing all our options in light of LIPA’s refusal.” He added, "It’s astonishing LIPA does not recognize that this global health crisis and its severe and unprecedented economic impact necessitates a change in posture."

Mark Fischl, a LIPA trustee, called the town and district’s request “outrageous.”

“All the reasons they outlined for a delay are the reasons they should accept the settlement offer,” he said.