November 12, 2013 | 1 comment | 992 views
LIPA seeks to cut tax payments to local schools
Utility accounts for nearly half of Island Park tax levy base
The Long Island Power Authority’s effort to settle tens of millions of dollars in tax grievance cases it has filed against local school districts and municipalities, including Oceanside and Island Park, could mean problems for those districts in the coming years.
The authority, as part of overhaul legislation backed by Gov. Andrew M. Cuomo this summer, had given the two school districts until Oct. 20 to settle the cases, but neither accepted, according to LIPA spokesman Mark Gross.
LIPA has proposed trimming millions of dollars in its annual tax payments to each of the districts and municipalities over 10 years starting in 2014, while giving up its claims to past overpaid taxes, which amount to tens of millions of dollars more. If there are no settlements and LIPA wins the challenges in court, taxpayers would face a significantly higher bill, including retroactive payments to LIPA for taxes it has paid in the past based on an over-assessment.
LIPA says that its plants — which include the Barrett Power Plant in Island Park — are over-assessed by upward of 90 percent, and have been depreciating for decades as they neared the end of their useful lives. The Barrett plant opened in 1956, and a second unit was added in 1963.
According to LIPA, Oceanside receives approximately $13.6 million in taxes annually from the utility, while Island Park receives $22.3 million yearly. For Island Park, that amounts to 46 percent of the school district’s tax levy. Officials in Island Park say that should the utility prevail in court with its claims of over-assessment, either the tax rate for homeowners would rise dramatically or numerous school programs would be on the chopping block.
The Oceanside district receives a much smaller percentage of its overall revenue from the utility. Louis Frontario, the district’s business manager, said that Class 3 properties — utilities — provide 9.8 percent of the tax levy.
LIPA proposed paying Oceanside $9 million per year over the next 10 years and Island Park, $10.05 million. LIPA officials say that offer has expired, but district officials do not see it that way.