S.5122-A (Gaughran) / A.7786 (Stern)

STAFF CONTACT :

Senior Director, Government Affairs
518.694.4461

BILL

S.5122-A (Gaughran) / A.7786 (Stern)

SUBJECT

LIPA Property Tax Assessment

DATE

Oppose

The Business Council of New York State opposes this legislation which is intended to extinguish LIPA’s right to receive fair assessments for utility property and allowing an unjust enrichment for less than 25,000 customers while burdening the other 1.1 million LIPA customers. No taxpayer should be denied their right to have their tax assessment reviewed and a special few should not be allowed to deny others lower electric rates.

Property taxes are LIPA’s third largest expense at over $538 million, or approximately 15 percent of customer bills. In 2016, LIPA’s Board of Trustees adopted a Policy to reduce customer bills by paying only the reasonable and economically justified level of taxes required by law.

LIPA has filed tax certiorari challenges against Nassau County, the Town of Huntington, the Town of Brookhaven, and the Village of Port Jefferson (the “taxing jurisdictions”) in an attempt to obtain a fair tax assessment on the four legacy plants. LIPA has committed to purchase power from these plants through a Power Supply Agreement (“PSA”) that runs through April 30, 2028. Under this PSA, LIPA reimburses National Grid for the property taxes assessed by each taxing jurisdiction.

Power plants are supposed to have their taxes assessed based on their value the current North Port assessment is significantly over valued. LIPA customers pay $196 million in taxes on four legacy power plants that supply only 22 percent of Long Island’s energy needs. Energy production has declined by nearly 63% since 1999, while taxes on the plant have increased 43%. 

Article 7 of the New York Real Property Tax Law was instituted to provide the taxpayer with an expedient and efficient mechanism for determining and correcting tax assessment inequities. For almost a century, the courts have provided broad latitude, so that taxpayers can maintain their rights to an accurate and equitable property tax assessment (NY Const, art XVI, § 2; NY Const, art I § 11). 

This bill is unconstitutional and will result in costly and prolonged litigation that helps nobody. It is not a solution to the Northport power plant’s high tax assessment.