The Northport-East Northport school district has come to a proposed agreement with the Long Island Power Authority on a settlement that would resolve the 10-year tax case between the two sides.
The school board has approved a deal which would reduce LIPA’s annual tax bill on the Northport power plant from $86 million to $46 million by 2027. Under the proposed settlement, LIPA will make several upfront payments to the school district, totaling $14.5 million, that would help offset tax increases to residents and businesses.
In addition, LIPA and National Grid would forgive the collection of in excess of $800 million in taxes and interest that they claim are owed. National Grid owns the Northport power plant, and has been a party to the tax challenge case. The plant’s output is distributed through LIPA’s Long Island electric system.
The proposal ensures that LIPA would pay in excess of $460 million in taxes to various jurisdictions in the Town of Huntington over the first seven years of the settlement, including $312 million to the school district, according to Town Attorney Nicholas Ciappetta. It also includes the likelihood of a five-year extension with the authority.
In a letter to the district community on July 10, Robert Banzer, school superintendent, said the proposed settlement comes as the court ruling in the tax certiorari case against the Town of Huntington appears to be imminent, adding that “the very real possibility of a court ruling against the town could result in drastically reduced tax revenue from LIPA to the school system and create significant hardship for our community.”
The settlement would also protect residents from having to pay retroactive tax payments of $10,000 to $25,000 per household in addition to significant increases to property taxes, according to Banzer.
The deal still must be approved by the Huntington Town Board and Northport school board. The school district will host a virtual workshop this week to answer questions and concerns from community members. The school board is expected to vote on the settlement at a July 20 meeting. The Huntington Town Board has until Aug. 11 to approve the settlement. The town plans on holding informational meetings and answer any questions that residents or others may have regarding the settlement framework and its impact.
“LIPA’s latest settlement proposal is, by far, the best offer presented to the Town to date — and that includes any municipality that has negotiated with LIPA over legacy power plants on Long Island,” said Huntington Supervisor Chad Lupinacci (R) in a statement. “That’s not my opinion; it’s a fact. The town’s ability to negotiate such terms is due in large part to the substantial resources devoted to the defense of the case and the zealous advocacy of the town’s attorneys.”
If the settlement is not approved by both the school board and the Town Board, LIPA has advised that the settlement offer will be withdrawn and will not be revived.
Suffolk County Executive Steve Bellone (D) responded favorably to the news.
“I have said from day one that it is critical for the parties to come together to settle this litigation and avoid a court decision that could be catastrophic for the community,” he said. “I commend all parties involved and particularly the community leaders whose advocacy helped produce a far better outcome for Northport residents.”
LIPA settled similar suits with the Town of Brookhaven/Port Jefferson over taxes for the Port Jefferson plant back in December 2018.