When State Senate and Assembly members and staff came together for a meeting Thursday evening on the plight of the American Water customers in Nassau County, they were still contending with the problem that blocked getting legislation in the budget to reduce American Water customers’ huge bills.
Simply put, there is no way to relieve the 125,000 American Water customers located in a swath of Nassau County stretching from Lynbrook to Sea Cliff of the extraordinary property tax burden they’re paying through their water bills without shifting that burden to other residents.
Some of those people would see such a shift as a tax increase.
And that makes a quick fix look like a poor political play for some elected officials, even as a 26% rate hike for American Water set to go into effect on May 1 looms.
But those staffers for state legislators met again Friday, amid increasing optimism and plans to introduce legislation in Albany early next week.
American Water customers pay bills that are often double those of nearby residents served by municipal water authorities. The bulk of the difference is property taxes paid by the company that represent as much as half of its customer’s bills.
During budget season, Nassau legislators tried to push through a fix that would create a Nassau County Water Authority to set the stage for municipalization. That’s the norm in a state where 96% of residents get public water, and would end all property taxes on the system. But municipalization takes time, so the plan also included an immediate shifting of a $30 million special franchise tax to pretty much all Long Island residents, via their other utilities, that would have increased natural gas bills about $2 a month. But their Suffolk counterparts balked.
So there was a second plan: create the authority and immediately move the special franchise tax to the other utility bills of only Nassau residents, boosting their gas bills about $4 a month. But that gave pause to some Assembly members in Nassau whose constituents are not American Water customers but would see the higher gas bills.
So in the closing days of budget negotiations there was a third plan to simply create the authority as a possible future path for municipalization. That, too, hit a wall.
Part of the problem has been a lack of support from County Executive Laura Curran and her staff, who have done more to slow the legislation than encourage it. One such move was asking that the county legislature be required to approve the water authority before the state gets it running. This would have given Curran political cover from charges by Republicans that she caused the increase in other utility bills. Another request was that the state kick in seed money for the authority.
County officials are also telling State Senators and Assembly members they’re not sure municipalization will work financially, doubt the conclusions of a report from the Public Service Commission and gubernatorial advisor Rory Lancman that pointed to significant savings if the system is taken public, and believe the May 1 deadline on the rate increase is artificial and should simply be postponed again by the PSC.
And the county recently asked legislators to change the legislation to create a "service area" instead of a water district, boast a nine-member rather than a five-member board and have its board members chosen by state rather than county leaders, requests that are seen as potentially obstructive.
A statement from Curran’s office to The Point Friday said only, "American Water ratepayers deserve affordable clean water and the County Executive looks forward to supporting a plan that provides them with much needed relief and doesn’t burden Nassau’s taxpayers. The scheduled May rate increase for American Water taxpayers shouldn’t just be postponed, it should be eliminated."
It’s not clear how all that could happen simultaneously, though county officials suggested the state should help with funding, as county officials so often do.
So, what next?
The version of the bill spreading the cost of the shift Islandwide will again be introduced as a starting point, with State Senators John Brooks, Jim Gaughran and Todd Kaminsky pushing it in their chamber and Chuck Lavine doing so in the Assembly.
The legislators are also sending a letter to the PSC asking that the May 1 rate increase again be postponed while this process unfolds. But the Long Island lawmakers still have big steps to climb in their own Democratic chambers convincing their conference leaders and fellow legislators that this deal needs to get done.
What’s uncertain is whether those big steps are ever going to get them anywhere.