Here in Northport, Issue One right now is a tax grievance filed in October by the Long Island Power Authority against the Town of Huntington. Less than a mile from my house is the biggest power plant on Long Island (and one of the nastiest and oldest on the East Coast). LIPA is claiming that the plant is assessed for much more than it's actually worth. Specifically, they want to reduce the assessed value by eighty-nine percent. Yes, that's right: 89%. Of course, that would mean that the PILOTs on the plant would fall by a proportional amount. If LIPA gains a total victory, it would create a revenue shortfall of tens of millions of dollars. The Northport-East Northport School District would see the hardest hit; right now, the LIPA payments account for over one third of the district's budget.
The Town has begun its defense of the grievance in the court of public opinion, with a press conference in the shadow of the plant's stacks. They've even put up a website (stoplipataxhike.com), and we'll soon be seeing red octagonal STOP LIPA TAX HIKE signs all over town. I've got to raise a sort of technical objection to those. It is a mischaracterization to state that any win by LIPA will automatically trigger a tax increase. All it would do is create a revenue shortfall. It would then be up to the elected bodies (the Huntington Town Board and the Northport-East Northport Board of Education) to determine how to close that budget hole, by increasing revenue (raising taxes), decreasing expenditure (cutting staff or programs), or a combination of those two. This being the case, it's a bit disingenuous to say that a sixty percent tax increase will come to pass for Northporters. Even if LIPA comes close to its intended goal, the tax hike would be much lower than the doomsday figures being bandied about, since it would (in the case of the school district) have to go through the normal budgetary process and be approved by the voters at the polls.
Let's now turn to the merits. Should LIPA get any or all of what it's seeking? Short answer: no. LIPA has said that it simply wants to pay its fair share. I, and most Northporters, agree. The dispute, then, turns on the definition of the phrase "fair share." The Power Authority is arguing that it means taxes commensurate with the true value of the plant, and not a cent more. But this plant doesn't unobtrusively generate power. For over four decades, those four candy cane stacks have towered over this town. They are each six hundred feet tall, which is two hundred feet above the highest point on Long Island. Why do they stand so tall? To keep the waste product from raining straight back down on the plant and its surroundings. It has been argued that the plant is responsible for beach erosion along the Village of Asharoken's north shore. LIPA has come a long way in upgrading the plant from its original design; the plant is less of a polluter than it has been in the past. But the effects on the host community have some cost, one that has effectively been borne by the premium in payments over and above those associated with the value LIPA claims. For the Power Authority to now claim that it shouldn't have to compensate Northport and the Town of Huntington for those effects reeks of arrogance.
Beyond the question of whether or not LIPA should pay less, the form of its claim also is suspect. By going straight to a legal challenge, it wants to simply pull the rug out from under the districts that receive this revenue. It'll be there one year, and gone the next. And if LIPA and the Town can't settle, then whatever reduction is ultimately won will be retroactive to the filing of the grievance last October. So there should be some type of planning ahead for this, right? Not so much. As I understand it, the district is legally precluded from building up reserves to combat this threat. Now, when it comes to our Board of Education, I often agree with the principles of the UTN-EN. I think that the Board sometimes has a tendency to play fast and loose with the people's money. I think it could stand to lose a few million dollars of revenue; that might force it into some hard choices at the collective bargaining table. But I would not wish on them the responsibility of having to impose millions of dollars in new property taxes on homeowners, while at the same time slashing and gutting the outstanding educational programs we have here. Those losses, combined with a loss of property value throughout the school district and the town, far outweigh whatever benefit may accrue to LIPA's ratepayers through the reduction of these payments.
PILOT = payment in lieu of tax. Since LIPA is a public entity, it technically doesn't pay property taxes. The PILOTs were agreed to as part of the dissolution of the Long Island Lighting Company about a decade and a half ago.
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