State Sen. Carl Marcellino announced on Monday that he had introduced a bill that would, if passed, address recent steep rate hikes for New York American Water customers, particularly for Sea Cliff ratepayers.
Following a decision by the Public Service Commission in May, NYAW customers have been paying the property taxes of the private water utility through their water bills. Surcharges can account for 50 percent or more of ratepayers’ bills, at least some of which have climbed to as high as $1,000.
“Municipally owned water customers are not burdened by property taxes. The same should hold true for private water utility customers,” Marcellino, a Republican from Syosset, said in a news release.
According to the release, the bill would create parity between public and private water companies by exempting private ones from paying property taxes for real estate they own. “By eliminating the property tax on private water utilities, customers’ bills will be reduced dramatically,” Marcellino said.
The senator’s bill came after outraged ratepayers and members of Long Island Clean Air Water and Soil and Stop Taxing Our Water demanded an amendment to statute 485-D of state property-tax law at a Nov. 16 news conference. The statute exempts private water companies that are regulated by the Public Service Commission, and that operate within cities of more than a million people, from paying property taxes, but it does not apply to counties, so private companies operating in Nassau County still must pay property taxes.
State Assemblyman Michael Montesano, a Republican from Glen Head, introduced legislation on Tuesday to address the same statute. The legislation would grant authority to counties, towns, villages and school districts to exempt water companies from paying property taxes. “It’s incumbent upon these authorities to take affirmative action to implement the exemption,” he said.
This is the third bill that Montesano has crafted in response to New York American Water’s rate hikes. On Sept. 9, he, Marcellino and Assemblyman Edward Ra, a Republican from Franklin Square, proposed two bills to help affected customers. The first would allow residents served by a private water utility to take a credit against their state income tax bills equal to the amount of their annual water bills, and the second would require the state comptroller to audit private water companies before and after rate changes were approved by the PSC.
When the State Legislature convenes in January, the respective bills will be reviewed in committee, and if passed, would go to the floor of the Assembly and the Senate for a vote.
Montesano said he believes Gov. Andrew Cuomo understands the issue that New York American Water ratepayers are facing. Cuomo, he said, indicated that he would be “attentive” once the new legislative session begins. “This is a constitutional problem,” Montesano said. “You have a small percentage of the population paying this tax on water, and that’s unequal treatment under the law.”
If the three bills were signed into law, Montesano said he believed ratepayers would see a “substantial change” in their water bills. “An average [New York American Water] bill is 80 percent surcharges,” he said. “If the statute is repealed, you’re removing 80 percent of costs off the bill, giving ratepayers a more even ground.”
Sea Cliff Mayor Edward Lieberman said he believed the legislation proposed by Montesano and Marcellino is needed. “The State Legislature is tuned into the severe financial strain being imposed on our residents,” he said. “This cause will bring [ratepayers] equal protection under the law as they’re applied to a natural resource.”
“We’re going to do whatever we can to give relief to the people who live in the New York American Water water districts,” Marcellino said.
The Legislature will convene on Jan. 3.