Town wins two court decisions against utility
Huntington Town is touting two court decisions boosting its case against the Long Island Power Authority in an ongoing challenge over the assessment of the Northport power plant and the amount the utility pays in property taxes on the facility.
The decisions, issued by State Supreme Court Justice John C. Bivona, were dated earlier this month and received by the town’s special counsel on Sept. 25. The first decision dismissed LIPA’s standing as a plaintiff in the case, since National Grid, and not LIPA, owns the plant, according to the decision.
The second decision granted a stay in the assessment case until there is a final court determination of the town’s argument that National Grid should be held to a 1997 pledge by LIPA not to challenge the plant’s assessment. So far, the town has won pretrial decisions in that case, according to a town statement.
LIPA is suing Huntington Town to recover some $270 million in property taxes it paid since 2010, arguing the aging Northport power plant facility is grossly over-assessed. Northport-East Northport school district is also a party in the lawsuit.
If LIPA wins, Huntington Town taxpayers could see a 15 percent increase in town property taxes and a 60 percent increase in school taxes, according to the town’s website.
The judge dismissed LIPA’s standing as a party initiating tax certiorari proceedings. In one of his decisions, Bivona said that while LIPA believes its financial interests are adversely impacted currently by a wrongly overstated assessment of the power plant, “the result is still remote and consequential and certainly does not constitute a direct loss because the property taxes levied upon the Northport Power Station are actually and directly paid by National Grid Generation, LLC.”
In the second decision, Bivona granted a stay to the town on each of the four tax certiorari proceedings National Grid commenced challenging taxes from 2010 to 2013. The stay was granted until completion of a case involving the town’s contention that National Grid, as the successor to LIPA, should be held to the 1997 pledge.
In previous decisions, the Appellate Division of State Supreme Court cited both a letter then-LIPA chairman Richard Kessel sent to the town and statements Kessel made to the Nassau-Suffolk School Boards Association, during which he said he would drop any pending tax certiorari cases and not initiate any further ones at any time in the future. In return, the town promised not to increase the assessment on the plant. The town has not done so.
Most significantly, Bivona’s second decision means the court needs to consider the validity of the town’s 1997 pledge argument before embarking on a trial on the actual tax challenges — which promises to be complicated, lengthy and expensive.
“These two significant decisions help clarify the process for resolving these cases by first addressing the town’s key contention: that at the heart of the case is our belief that promises made by both sides should be kept,” Huntington Supervisor Frank Petrone said in a statement. “In the long run, resolving that question first should save taxpayers money by potentially obviating the need for a lengthy and expensive trial on the technical question of the assessment.”
A spokesman for the Long Island Power Authority said the utility didn’t have a comment on the issue.