LIPA's Nassau deal needs one more tweak

The long-running battle between the Long Island Power Authority and the municipalities hosting Long Island’s legacy power plants is nearing its end.

That end, for two Nassau County plants yet to reach deals, must come via agreements that are fair to both LIPA ratepayers and communities hard-hit by the resulting reduction in tax revenue. But stubbornness has marked this 12-year donnybrook, and a court date set for May could leave Nassau liable for as much as $800 million in tax refunds to LIPA if a judge has to rule.

A little math and some common sense might be all that’s needed. The last holdout, the North Shore school district, has legitimate concerns about the deal and the disparity in dollars won’t cost much more to fix.

Nassau County Executive Bruce Blakeman has agreed to a deal with LIPA that cuts the taxes on its E.F. Barrett plant in Island Park and its Glenwood Landing site by about 47%, patterned after reductions on plants in Brookhaven and Huntington towns.

There’s a big difference, though. Huntington refused to settle until the Northport-East Northport school district, hugely dependent on its share of the $84 million that had been paid annually on the Northport plant, was satisfied with its treatment in a separate suit. That holdout netted the school district $14.5 million, and created a pattern from which other districts hosting plants could expect to benefit.

Nassau hasn’t made the same commitment to hold out until the North Shore and Island Park districts are satisfied. Legislature Presiding Officer Rich Nicolello did, when Democratic former County Executive Laura Curran brought the Legislature much the same offer. Now his position has shifted. While he says he wants the districts taken care of, he fears the May court date could force county approval without the school districts’ concerns being addressed.

LIPA says it calculated the settlement costs based on the relative generating power of each site, offering Island Park $5.5 million, and North Shore $1 million. That formula pays Northport-East Northport about 36% of the total tax reduction on the Northport plant and Island Park about 31% of the reductions at E.F. Barrett. But it pays North Shore just 10% of Glenwood Landing’s reduction.

The Nassau districts have other issues with the tax reductions that LIPA can’t fix. The county’s unique four-class property tax structure requires the reduced assessments on the plants be dealt with in a way that could force the school districts to increase tax rates significantly. But that can’t happen unless voters agree to bust the state cap on property tax hikes.

That is for the districts to decide at another time.

It is essential to move past this decades-old tax grievance litigation filed on behalf of LIPA ratepayers, but the deal must be equitable. The North Shore school district deserves more than the $1 million offered.