Court orders LIPA to pay school districts

State Supreme Court Justice Anthony Marano has ordered the Long Island Power Authority to immediately pay a little more than $3.7 million of $50 million that it owed to school districts across Nassau County.

LIPA had withheld 7.4 percent of the total amount in Payments in Lieu of Taxes, or PILOTS, that it owed, saying that its payments to districts were limited by the LIPA Reform Act of 2013. Some 32 area districts sued as a result.

Without Marano’s order, South Shore residents would have seen their property-tax bills rise or services reduced in the future to make up for lost taxes. LIPA, however, noted in a statement that electric rates will likely increase to pay for the PILOTs.

When LILCO’s Shoreham Nuclear Power Plant was closed in the mid-1980s, talks began to do away with the lighting company and replace it with a public authority. Shoreham was fully decommissioned in 1994, and LIPA was born in 1998. Fifteen years later, the Public Service Enterprise Group, PSE&G, a private entity, took over LIPA’s daily operations, managing its electric system.

LILCO paid taxes on properties that it owned. When LIPA took over, the utility’s properties were supposed to have been taken off Nassau County’s tax rolls, and LIPA was supposed to have made PILOTs on them, according to Cynthia Strait-Regal, the Bellmore-Merrick Central District’s deputy superintendent for business.

LIPA’s properties, however, were never removed from the rolls, and the authority continued to make tax payments, Strait-Regal said in an earlier interview. “They were getting tax bills, and they were making payments,” she said.

After LIPA was restructured in 2014, it was decided that the utility would make PILOTs. The county took LIPA’s properties off the tax rolls last year.

It was further decided, Strait-Regal said, that PILOTs could not exceed 2 percent, in line with New York state’s tax-levy cap. “They put their own cap on” the PILOTs, she said.