Local town, county, school and village officials gathered outside the Long Island Power Authority’s E.F. Barrett power plant in Island Park on Jan. 17, and called on the electric utility to respect what they said was its moral obligation to the community in its ongoing tax reduction proceedings.
Standing amid a light sprinkling of snow, Town Councilman Anthony D’Esposito, Receiver of Taxes Donald Clavin, County Legislator Denise Ford and Island Park village and school representatives asked LIPA to stop its efforts to drastically lower the property tax valuation on the plant, a move they said would “devastate” the Island Park community. The plant’s tax payments are nearly 50 percent of its school district budget. If successful, Island Park home and business owners could expect a $3,000 average school-tax hike.
“A property tax challenge by LIPA on the plant would devastate this community that I call home,” D’Esposito said. “LIPA’s assessment challenge is the wrong thing to do to local neighbors.”
Additionally, D’Esposito called on the power authority to reconsider a refurbishment, or repowering, of the plant to make it more energy efficient. LIPA decided against the action after an April report — conducted over three years by PSEG Long Island — asserted that it would not make economic sense. D’Esposito also voiced support for the school district’s ongoing legal effort to block the reduction based on a 1997 power supply agreement.
LIPA has countered that the cost of its overpayment on the plant is unfairly passed onto the utility’s customers outside Island Park. According to LIPA, nearly 20 percent of any given Town of Hempstead customer’s bill can be attributed to “over-taxation” on plants where it is seeking to reduce assessed valuation.
Other officials have taken a more moderate stance. During an August Board of Education meeting on the issue, State Senator Todd Kaminsky encouraged the school district to negotiate with LIPA.
“There are places on Long Island that won’t even entertain a settlement because they want to fight the power company,” Kaminsky said. “And one of them is going to end up in a really bad place ... If we could do this in a responsible way, we could be a model for all the other places that are facing this. No one has [settled] yet. No one wants to be there to make sometimes really tough, awful decisions.”
The school district’s suit against LIPA claims that a power supply agreement made in 1997 contained language that prevented it from challenging the assessment on the plant unless LIPA officials believe the utility has been unfairly singled out for taxation. That language is not present in an amended agreement from 2012.
Bob Cohen an attorney for the Island Park School District has argued the utility was never “targeted” for taxation. “They’ve never made that allegation,” he said.
If the district were to settle with LIPA at 50 percent, which is the electric provider’s standing offer to all municipalities in related suits, the school district could lose almost a quarter of its nearly $39 million budget.
A deadline to file summary judgment motions for the suit has been set for Feb. 27 to determine whether, based on submitted evidence, one party cannot win. If no summary judgment is granted and no settlement reached a trial date has been set for April 23.