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Mostly Cloudy PSEG disputes what it owes
County tries to allow partial payments; schools concerned
In August, PSEG owed the three towns in Nassau county — Hempstead, North Hempstead and Oyster Bay — $30.4 million in payments in lieu of taxes, but sent them a total of only $29 million. The receivers of taxes in all three towns rejected the payments, because the law requires full payments.
The towns, in turn, withheld $30.4 million in tax payments from the county. The county waited until the end of August for those payments, after which the county treasurer became responsible for collecting them.
County Executive Ed Mangano wants to give PSEG a chance to “catch up” on its tax bill by making partial payments. Under a proposal he put before the County Legislature on Sept. 21, the county treasurer would be allowed to accept PILOTS from the utility of $1 million or more.
The E.F. Barrett Power Plant, which, technically, is located in both Island Park and Oceanside, is owned by LIPA but operated by PSEG, under an agreement they signed at the end of 2013. Because it is a state entity, the power company does not actually pay taxes, instead making the PILOTS. The payments are treated, and distributed to school districts, as taxes. This year, LIPA instructed PSEG to follow the LIPA Reform Act of 2013, which caps those payments at 102 percent of the previous year’s on properties like the Barrett plant. PSEG then notified the town tax receivers that it would not pay anything over the 2 percent cap, and made what the towns considered only partial payments, which were rejected. The full payments would have put the utility over the Reform Act cap.
Some county officials said they are concerned that the shortage of funds the non-payments have caused will have to be made up by homeowners, who are already facing a PSEG rate hike. When Mangano’s proposal was introduced in the Legislature, County Legislator Delia DeRiggi-Whitton asked why the county had not pursued PSEG for the tax money before this, perhaps by enforcing a lien on PSEG property.
“This 2 percent cap the state imposed on the utility is nothing but a shift from the ratepayers to the taxpayers, and has created this mess that we’re in right now,” said Legislator Richard Nicolello.
