Plan to help American Water customers not afloat in Albany

Daily Point

New York American Water plan all wet?

At first, this year’s attempts on the part of Gov. Andrew M. Cuomo and several of Nassau County’s state senators to throw a long budget ball for a touchdown on New York American Water looked good, and why not?

It’s the kind of play Cuomo has converted into big scores for more than a decade.

But now it looks like the pass has fallen incomplete as time runs out on this year’s budget, thanks to opposition from Suffolk Assembly members who don’t want their constituents to pay more on their gas bills and Assembly members generally, who don’t like being rushed.

The issue at hand is twofold: immediately fixing a special franchise tax burden on 124,000 American Water customers in Nassau County that more than doubles some of their water bills compared to those who get municipal water, and the need to create a Nassau County Water Authority that would potentially take over those water-for-profit systems.

The impetus for sudden action is a hefty report released last week that was spearheaded by Rory Lancman, Cuomo's recently hired special counsel for ratepayer protection at the Department of Public Service. That report led to plans inserted in the budget proposals of both Cuomo and the Senate that would take about $30 million of the tax burden on American Water’s Nassau customers and spread it out among all Long Islanders who use natural gas via their National Grid bills, hiking those bills about $2 a month.

Lancman has argued that the timing is crucial and the time is now, citing a 26% rate hike set to hit American Water customers on May 1 and the pending sale of the system to Liberty Water for $607 million, which the PSC has frozen while a fix is sought. The budget deadline adds urgency, too, but only if enough players want to pass it.

But the fix got practically no support in the Assembly outside of American Water’s service area, thanks to what members called a combination of hurt feelings, fears of constituent anger, a lack of urgency and a desire to split the bill into two concepts.

And now the first part of the plan, the tax shift, is dead, leaving two senators, Jim Gaughran and Todd Kaminsky, fighting like mad to get the authority created. Both men told The Point on Wednesday afternoon that they weren’t even sure they could get that, but that they had the support of their conference leader and were pushing hard for Assembly support they said was not yet blossoming.

"Listen, establishing the Nassau County Water Authority is a great idea," said Assemb. Chuck Lavine, who swears he is pushing the idea and represents some of the American Water service area. "But the tax shift, essentially unrobbing Peter to rob Paul, it’s not popular in the rest of Nassau and it’s not popular in Suffolk, because people would have to pay more."

But Lavine said timing and tactics are a problem, too.

"This report that came out so recently is big and complicated, and we’ve barely had any time to look at it, particularly during the last week of the budget," Lavine said.

Asked if he thought the initiative is dead, Lavine said, "I think it’s really problematic."

And though Lancman and the PSC pushed hard Wednesday for an alternative plan that would only spread the shifted $30 million among Nassau gas customers, costing them about $4 per month, Lavine said in a text to The Point, "Tried-didn’t work."

And so another hot plan found a cold grave in the budget cemetery.

—Lane Filler @lanefiller

Talking Point

Suozzi leading charge to stop any infrastructure bill without SALT repeal

Tom Suozzi has put down a marker as the first Democrat in the House of Representatives to say he will not vote for the infrastructure bill that President Joe Biden is unveiling Wednesday unless it contains a repeal of SALT, which limits state and local tax deductions on federal taxes.

Biden’s $2.25 trillion federal spending plan will be sent to Congress as two separate bills. The president says his massive public works effort will spur jobs and make the nation more competitive over the next eight years.

The best path for the passage of a SALT repeal is for the provision to be included in the first House infrastructure spending bill, which has the best chance of passage in the House and Senate. That is why Suozzi and others are making the move now to pressure House Speaker Nancy Pelosi to include it.

Suozzi represents CD3 along the North Shore from Huntington into Queens, where homeowners have some of the highest property tax bills in the nation. He and four Democrats from New Jersey have, as Suozzi says, "drawn a line in the sand" on this issue.

Other Democrats from states with high income and property taxes are expected to join the group in the coming days, including some of the 11 members who signed a letter to Biden last month asking him to include repeal of the Trump-era deduction in the infrastructure bill. The 2017 Trump tax bill placed a cap of $10,000 on the deduction.

If Suozzi and his allies can push the number into the high teens, it could cleave the caucus as Pelosi doesn’t have a lot of extra votes to work with on passing Biden’s plan.

"There are a lot of people that support what we are doing, the question is who has the guts to say it. We get more and more people every day," Suozzi told The Point.

While Suozzi supports an increase in the highest federal personal tax bracket, he thinks it’s a mistake for Albany lawmakers to hike state taxes. A federal tax hits high earners in every state, but if higher taxes are only in New York, those who can live elsewhere might flee.

"People in New York are getting killed on taxes and they will leave," Suozzi said.

Senate Majority Leader Chuck Schumer has long said he wants a SALT repeal but has yet to say whether he will work with the White House to get it included in the first infrastructure bill.

"He is looking for the best way to repeal the SALT deduction cap," said Schumer spokesman Angelo Roefaro.

—Rita Ciolli @ritaciolli

Pencil Point

Employee satisfaction not guaranteed

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Final Point

MAGA hat-wearing groundskeeper won’t be making his union great again

Last month, The Point reported on the union presidency bid of Salvatore Esposito, the Suffolk County Community College groundskeeper who got some attention in the spring of 2019 for wearing a Make America Great Again hat on the job.

The results for that Suffolk County Association of Municipal Employees election are now in: Esposito’s hat-wearing campaign was unsuccessful, resulting in less than 1% of the vote, according to a Suffolk AME spokesman.

The winner was incumbent union president Daniel Levler, who campaigned on delivering a long-term contract with raises, plus preventing layoffs and keeping members safe during the pandemic, according to the spokesman, Michael Skelly.

Suffolk AME represents over 10,000 active and retired workers in Suffolk government from social services to crossing guards, and apparently Esposito’s message about free expression and MAGA wasn’t able to break through with members who returned close to 3,000 counted ballots.

Esposito said he’s still pursuing his $500,000 lawsuit against the college for banning his MAGA hat on the job and is thinking about future political moves. "Maybe Assembly someday in the future."

"I’m gonna be on Long Island," he said. "I’m not moving anywhere."

—Mark Chiusano @mjchiusano