The New York State Senate passed a bill on Feb. 11 that would prohibit the Long Island Power Authority from receiving tax refunds from local municipalities for its properties, including the E.F. Barrett Generation Station in Island Park.
Waiving the tax refunds is part of a proposed settlement between LIPA and the county. LIPA would forgo $250 million in tax refunds it is owed by the county if it could cut its annual property taxes on the Barrett plant by 50 percent. This would shift the school tax burden onto homeowners, resulting in gradual tax increases beginning in the 2021-22 school year, with an initial increase of about $24 per month. By the 2026-27 school year, taxpayers would see a $203-per-month hike. LIPA estimated the numbers based on the value of the average home in Island Park, about $397,000, but the figures could change.
With the Senate-approved measure, which now moves to the Assembly for consideration, lawmakers said they aim to “limit the financial impact of adverse tax certiorari challenges by LIPA on affected local governmental entities,” according to the bill. The same measure passed in the Senate last year. but not in the Assembly.
Sen. James Gaughran, a Democrat from Northport, is the bill’s main sponsor, and Senators John Flanagan, a Republican from East Northport, and Todd Kaminsky, a Democrat from Long Beach, co-sponsored it. Kaminsky noted that if tax refunds were out of the equation, Nassau County could be in a better deal-making position with LIPA.
“LIPA has held the threat of collecting these back [tax refunds] over the people of Island Park, stirring fear and uncertainty,” Kaminsky said. “I call on the New York State Assembly to immediately take up this legislation and help make it law.”
In announcing the settlement terms in November, County Executive Laura Curran pointed to the county’s savings in tax refunds as the main motivation for the agreement.
“This settlement is in the best interest of Nassau County residents,” Curran said. “It safeguards us from paying hundreds of millions of dollars of tax refunds. The facts support the claim that these plants have been over-assessed. This common-sense agreement protects our taxpayers from costly litigation, which would have resulted not only in substantial refund payments, but also devastating tax hikes to the affected school districts.”
The County Legislature must approve an agreement for a payment in lieu of taxes, or PILOT, connected with the LIPA-county settlement for it to be finalized. It is unclear when the Legislature might vote on the measure, and Legislator Denise Ford did not respond to the Herald’s calls requesting comment by press time Monday. The Legislature’s next public meeting is Feb. 24.
“Time is of the essence,” Kaminsky said. “The Assembly has to take this seriously.”
Island Park Board of Education President Jack Vobis agreed. “This bill could be very helpful for us, but the clock is ticking,” he said. “It would give Nassau County incentive to hold out for a better deal and LIPA to come forward with one.”
Assemblywoman Melissa Miller, a Republican from Atlantic Beach, said she would “of course” vote for the bill and rally her colleagues to do the same. “It’s encouraging that it passed in the Senate, and I’m hopeful that we can pass it through the Assembly,” she said.
Miller has proposed two other bills that, should the county’s settlement with LIPA be finalized, would provide aid to Island Park families and the Island Park School District. “The concern is that homeowners and the school district can’t bear the burden,” she said. “Island Park is a hardworking community, and we don’t want people forced out of their homes.”
LIPA officials declined to comment, saying they do not discuss pending legislation.
In November, LIPA CEO Thomas Falcone said the utility chose to ease into the agreement to lessen the burden on taxpayers. “Rather than go to court and seek a fair tax bill . . . what we tried to do was see if there was some room with Nassau County to find something that would get to a more sustainable tax bill,” he said at the time. “These taxes are so high, and we want to get to a tax bill that might require future use for the site, but we want to give the community time to adjust.”