LIPA, Brookhaven reach power plant tax deal

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PORT JEFFERSON -

The Town of Brookhaven and LIPA have reached a tentative deal involving the $32.5 million in property taxes the utility pays each year for the Port Jefferson power plant.

LIPA previously filed a lawsuit against Brookhaven arguing the town inflated the value of the plant in order to collect more taxes on it. But the cut for LIPA could mean tax hikes for thousands of homeowners in Port Jefferson.

"I can't afford it if they raise my taxes anymore," says resident Mike Carastis. "They're $10,000 a year, and I'm living on Social Security. It's not easy."

Under the proposed deal, the taxes would be cut in half, and the difference would be phased in over about nine years.

The deal may cut costs for LIPA ratepayers, slightly. But the power plant's tax payments cover about 40 percent of the budget in the Port Jefferson School District, according to Newsday.

The district could lose about $900,000 a year for almost a decade. Brookhaven Supervisor Ed Romaine says with the plant having been overvalued for so long, the district took in far more than it should have.

"They've collected for many years a great deal of money on a plant that some people say has been over-assessed," he says. "This property was out of line. We're bringing it into line. So they will have to live the way other school districts do."

The proposed deal could have an impact on three other lawsuits LIPA has filed over the taxes it pays on power plants. One is in Huntington, and the others are in Nassau County.

It also avoids what could be a costly legal battle that had the chance of awarding LIPA a massive lump-sum payout if the town lost.

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