LIPA settlement offer powered by common sense

For the past few years, three of the leaders in the fight against the Long Island Power Authority’s attempt to massively reduce its $86 million annual property-tax payment on the Northport Power Plant railed against the settlement offers LIPA made.

Now all three say the current deal on offer, negotiated with the guidance of Suffolk County District Administrative Judge C. Randall Hinrichs, is one the Town of Huntington and the Northport-East Northport School District should agree to before it’s too late.

They’re right. This is almost certainly the last chance before a potentially devastating ruling is handed down.

John Gross, the attorney for the school district, has held off LIPA for nearly a decade. But his long battle to rest the current valuation on a 1997 letter from a former LIPA head promising not to challenge the plant’s assessment lost in court. Gross says an appeal would be difficult, and a significant reduction in LIPA’s tax payment is likely if a judge has to rule.

Chad Lupinacci, the Huntington Town supervisor, has also aggressively pushed LIPA to sweeten the pot but now says this is the deal the town must accept.

And Paul Darrigo, the firebrand founder of Concerned Taxpayers Against LIPA, wrote in a message to that group that “in the end, the risk of NOT settling is too great.”

This offer, the fifth to be considered, includes a reduction in the plant’s taxes from $86 million to $46 million over seven years, an additional $14.5 million for the district over that time and a five-year extension of that $46 million rate if the plant is part of a new power-purchase agreement after seven years. It is tens of millions of dollars better for town and district taxpayers than LIPA’s previous offers. And it removes the threat of a refund that could require the town to pay LIPA as much as $850 million immediately, which the town’s property owners would have to pay.

Such power plant tax challenges are not uncharted waters. Rockland County refused to settle similar appeals on two plants and in 2006 a judge slashed the taxes and ordered a $225 million refund. Residents saw their tax bills double and their property values nosedive. The state did not come to the rescue. The North Rockland school district eventually lost about 20% of its staff, or 200 positions.

There is still a local “never settle” movement, but the strategies it embraces, like a town takeover of the plant or a financial bailout from Albany, are especially unrealistic amid the financial devastation of the coronavirus.

The plant is overassessed. The challenge has been finding a fair path to stop the overpayments that were billed to all LIPA ratepayers without upending the communities that hosted the plant.

This is that path. At its meeting Monday, the school district should accept the deal, and the Town of Huntington must follow suit at its August meeting, before LIPA drops its offer and a judge drops the hammer.

— The editiorial board