Stop LIPA’s Tax Grab

Huntington Supervisor Chad Lupinacci (R-Huntington) is suing the Long Island Power Authority (“LIPA”), and their partner National Grid - to stop a massive local tax increase. Sen Jim Gaughran (D-Northport) has now followed with a NYS Senate bill - passed in the Senate last week - to stop LIPA from grabbing tax refunds from any reassessment. Both men deserve our full support.

LIPA filed tax certiorari proceedings to cut the longstanding property tax assessments on its Northport Power Plant by up to 90%. Currently LIPA pays approximately $84 million in property taxes for Northport. $55 million of that goes to the school district: A 90% LIPA reduction would impose $50 million in new taxes (out of a school budget of $139 million - a 35% tax increase) on homeowners in the school district. Another $25 million in new taxes would hit all Huntington residents. And LIPA is seeking hundreds of millions of dollars more in retroactive “back” refunds - which could literally bankrupt the school district and town.

Were LIPA a private company operating in a competitive power market, a property tax reassessment might make some sense. But it isn't, and it doesn’t: LIPA is a government agency, operating a government-granted monopoly. Founded in 1985, to take-over the private power company LILCO after the shutdown of the Shoreham Nuclear Power Plant, LIPA absorbed LILCO’s debt, and has contracted-out Long Island's power supply management (most recently to PSEG), and paid down that debt, for over 30 years.

Because LIPA is a government agency, a “tax reduction” for LIPA means a tax increase for everyone else. Add to that the 1997 Power Supply Agreement between LIPA and National Grid - backed-up by promises from then - LIPA Chairman Richard Kessel - that LIPA would never seek to change its local tax payments, which LIPA has ignored.

LIPA’s tax proceedings are nothing but a tax grab - and an existential threat to our school districts and neighborhoods. LIPA’s Chairman is a government appointee, Ralph Suozzi - the same Ralph Suozzi who was former Mayor of Glen Cove - who should hear loud and clear that LIPA’s tax grab is an abomination.

The Leader calls upon the NYS Assembly to pass, and Gov. Cuomo to sign, Sen. Gaughran’s LIPA bill; and wishes Supervisor Chad Lupinacci the best in Huntington’s law suits against LIPA.