LIPA’s new deal may spike property taxes

The new deal to restructure LIPA may contribute to a spike in taxes. The deal is supposed to change the way LIPA works and keep electric rates in check. News 12 has learned that the plan approved

News 12 Staff

Jun 26, 2013, 12:13 AM

Updated 3,983 days ago

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LIPA’s new deal may spike property taxes

The new deal to restructure LIPA may contribute to a spike in taxes.

The deal is supposed to change the way LIPA works and keep electric rates in check. News 12 has learned that the plan approved by lawmakers in Albany could result in higher property taxes for several Long Island communities.

LIPA has filed lawsuits against the Town of Huntington and other municipalities over the taxes the utility pays on its power plants.

LIPA pays about $20 million per year in taxes on its power plant in Port Jefferson, a school district that would be affected by a loss of tax dollars if the deal is approved. In Northport, LIPA pays $74 million.

Under a pending deal, LIPA would drop the lawsuits in exchange for the towns lowering the assessments on the plants by roughly 5 percent each year for 10 years. School districts and towns are worried they may have to increase property taxes by that amount to make up the difference.

Supporters of the deal say the loss of tax money will be phased in over multiple years to lessen the impact. They say that if LIPA wins court challenges, towns could potentially have to refund hundreds of millions of dollars in back taxes.

Municipalities have four months to decide whether to accept the deal or take their chances in court with the assessment trial.


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