Politics & Government

Cuomo Deal Seeks to End LIPA Tax Battle Outside Courts

Deal would forgive $171 million tax challenge, phase out any property tax reductions.

Following the passage of his LIPA restructuring bill Friday, Governor Andrew Cuomo reportedly presented a deal to LIPA and the Town of Huntington that could end their tax battle outside the courts.

Assemb. Andrew Raia, R-East Northport, said Monday that Cuomo's deal would forgive the $171 million in back taxes LIPA claims it's owed by the Town and a new reduced assessment of the Northport plant, agreeable between the Town and LIPA, would be determined going forward.
 
Any property tax reductions would be phased out over a ten-year period under the deal, intended to soften the blow, but the taxpayers of the Town and Northport-East Northport School District would still take a considerable hit.

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"They want to reduce taxes that the power plant pays to the school district and town by somewhere between 51 and 53 percent over a 10 year period," Raia said. "That is still a huge number in my opinion. And the problem with the school district is that, with the two percent tax cap, they can only raise taxes two percent. They could possibly pierce the cap if they could make the argument to the taxpayers but there's no gaurantee that that will happen."

Cuomo is also granting a four month period in which the town and LIPA can try and negotiate a better deal. They have four months to either accept it, renegotiate it, or go back to court, according to Raia.

The deal was an "agreement in principle" according to Raia and offered outside of legislation. Cuomo did not address the tax grievance filed by LIPA against the Town in the legislation, despite 9,418 signatures on a petition to "include language that will protect the taxpayers of our Town by requiring that LIPA, and all others, abandon all existing Tax Certiorari proceedings against The Town of Huntington."

"To the Governor's credit," Raia said, "he does want to sit down and work this out, because he realizes it's not good for anybody to have such a $171 million tax liability being held over a municipal government's head." 

It's not clear if the Town is willing to consider the deal and requests for comment from the Town and Northport-East Northport School District have not yet been returned.

Patch will continue to update this story as more information becomes available.


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