Northport school officials are calling for Long Island Power Authority to uphold a decades-old promise over taxes on its power plant as a June trial date looms.
Superintendent Robert Banzer has called for LIPA to stand by a 1997 agreement made between the district, the utility company and former New York State Gov. George Pataki (R) in an April 16 letter to community residents. Banzer alleged the power company had agreed not to seek to lower the assessed tax value of the Northport power plant as long as local authorities did not abusively increase it over time.
“While it is a very complex issue that goes back to the 1990s, it boils down to one simple premise: LIPA made a promise to our school district and we are fighting hard to make sure they, and others, continue to fulfill their promise,” Banzer wrote in the letter.
“LIPA made a promise to our school district and we are fighting hard to make sure they, and others, continue to fulfill their promise.”
– Robert Banzer
In 2010, LIPA and National Grid filed a lawsuit against the district challenging the assessment of the power plant and demanding a 90 percent reduction in taxes, also seeking the difference in tax refunds retroactively.
“Obviously, a 90 percent reduction to the power plant’s assessment would be devastating to the school district, its residents and most importantly, our students,” Banzer wrote.
The district currently receives about 38 percent of its overall revenue from the taxes paid on the Northport power plant, or the equivalent of nearly $53 million per year.
The superintendent said the district has been involved in settlement discussions with LIPA “which at this point, has not yielded a reasonable resolution.” The utility company’s latest proposed settlement would be a 50 percent reduction in taxes over a nine-year period, according to the
superintendent, which would increase the tax burden on district residents by millions per year. Banzer said if this proposal took effect, the schools would be forced to “make additional modifications, including cutting programs and staff significantly.”
In his letter to residents the superintendent stated that the district remains open to negotiating a settlement with LIPA. He did not respond to requests for further interviews.
The two parties have limited time to reach an agreement as a state supreme court trial is slated to begin in June.
“Obviously, a 90 percent reduction to the power plant’s assessment would be devastating to the school district… ”
– Robert Banzer
State senators John Flanagan (R-East Northport) and Ken LaValle (R-Port Jefferson) introduced legislation April 20 that could help mitigate any potential impact of the lawsuit on Northport taxpayers. The bill seeks to lengthen the time frame over which LIPA’s taxes would be gradually reduced from nine years to a proposed 15 years. In addition, it would grant the municipal governments and school districts who lose a tax assessment challenge to LIPA after April 1, 2018, access to the state’s electric generating facility cessation mitigation program. This way, town government and schools could create reserve funds to mitigate the burden on their taxpayers.
Other municipalities, villages and school districts have had better success in bargaining with the utility company to varying degrees. Brookhaven Town Supervisor Ed Romaine (R) announced April 3 that the town government had reached a settlement with LIPA on its assessment lawsuit over the Port Jefferson power plant. Port Jefferson School District officials called this news “deeply troubling.”
“This decision will … place the school district in harm’s way,” the district’s statement said.
A community forum will be held May 1 at 7 p.m. in Northport High School’s auditorium where district taxpayers can learn about the potential impacts of the LIPA lawsuit on their school taxes and their children’s education as it moves forward.