Island Park Public Schools officials are still awaiting the outcome of the district’s lawsuit against the Long Island Power Authority, after the utility company proposed a settlement with Nassau County in November to reduce its taxes on the E.F. Barrett Generation Station.
The tentative tax agreement would slash LIPA’s tax payments on the power plant in half over seven years, while leaving room for an extension of the plant contracts at the lowest tax level for another four years. This would result in increased school taxes for residents.
“The district has been very aggressive about fighting LIPA over the last 10 years,” Superintendent Dr. Rosmarie Bovino said. “We’re very concerned about the annual school budget and the impact it’s going to have on homeowners, because that’s where the county appears to be shifting the burden.”
LIPA has been trying to challenge the Barrett plant’s property assessment and significantly cut its taxes since 2010, and has also challenged taxes on three other plants across Long Island. In response, Island Park Public Schools joined several municipalities and school districts potentially affected by the grievances, seeking an injunction that would prevent LIPA from reducing its property taxes. They did so on the grounds that a written and verbal agreement had been made among then Gov. George Pataki, members of the LIPA board and the taxing entities that the utility would not grieve its taxes on the plants when it took over Long Island Lighting Company in 1998.
At the Dec. 16 Board of Education meeting, Bovino presented information on the LIPA tax case and discussed the district’s next steps. Its lawsuit is still under judicial review in Suffolk County Supreme Court. School officials presented their case to Judge Elizabeth Emerson several months ago, Bovino said. However, she noted, the courts will “likely issue a summary judgment in LIPA’s favor.”
“We don’t have that decision, but that’s what has been indicated to us,” she said.
If the county approves the most recent agreement, the terms would go into effect regardless of the district’s pending lawsuit, Bovino said.
The Barrett power plant is currently taxed at $42 million per year, and the Island Park School District receives $16.1 million of that, while the Oceanside School District receives $8 million, she explained.
If the Nassau County Legislature approves the settlement, LIPA’s taxes on Barrett will decrease to $21 million, which means that Island Park schools would receive $8 million and Oceanside schools, $4 million.
LIPA officials released estimates of the impact the decision would have on the community, but noted that they were subject to change. Island Park and Oceanside residents would not see an increase in their school taxes until the 2021-22 school year. The average Island Park resident pays $4,729 in school taxes annually and would see an increase to $4,945 in 2021-22, and a spike to $7,246 by 2026-27. For Oceanside, the average school taxes would increase from $8,302 to $8,600 in 2021-22, and to $9,331 by 2026-27.
“Rather than go to court and seek a fair tax bill . . . what we tried to do was see if there was some room with Nassau County to find something that would get to a more sustainable tax bill,” LIPA CEO Thomas Falcone said in November, after announcing the proposal. “These taxes are so high, and we want to get to a tax bill that might require future use for the site, but we want to give the community time to adjust.”
The decision would take LIPA off the tax roll and onto a payment in lieu of taxes, or PILOT, plan to pay its taxes, which district officials said they hoped county legislators would not approve. Bovino indicated at the meeting that county officials had based the PILOT schedule on incorrect numbers that would negatively impact taxpayers.
“So the district is negotiating to keep the Barrett power plant on the tax rolls,” Bovino said. “We do not want it to come off onto a PILOT. Under a PILOT, there are no controls over the tax rate increase from one year to another.”
Bovino and the Island Park Board of Education met with representatives of Nassau County, LIPA and the Town of Hempstead on Dec. 17 to discuss the issue.
“We’re looking to see if there are additional ways we can help soften the blow,” County Legislator Denise Ford told the Herald, “[such as] funds we can tap into and state aid, and seeing if we can give aid to school districts in the next seven to 15 years.
“Unfortunately, LIPA had the right to go and challenge their assessment,” Ford added. “With the settlement, they will in effect give up and not go after that challenge, which saves the county from having to pay millions in back taxes.”
Ford also said she would like to hold a public hearing on the issue sometime this month, but there is currently no set date for such a meeting.
Mike Smollins contributed to this story.