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Superintendent says court action could cost Middle Country Central School District about $774,000
Summary
At a regular board meeting, the superintendent reported that a pending court ruling could reclassify Long Island Power Authority property to a PILOT capped at 2% of its 2013 assessed value, creating an immediate revenue shortfall the district estimates at roughly $774,000 beginning 01/01/2027.
At a regular meeting of the Middle Country Central School District board, the superintendent warned that a pending court decision involving the Long Island Power Authority could remove LIPA property from the tax base and treat it as a PILOT (payment in lieu of taxes) capped at 2% of 2013 assessed value, creating a revenue gap the district used in budgeting.
The superintendent said the change could be directed by a judge as soon as next week and would take effect 01/01/2027 if the court order stands. He estimated the district's one-year shortfall at about $774,000 and said the change would also reduce the levy's future growth because the property's assessed-value growth would be excluded from the tax base.
"That's a big deal," the superintendent said, describing how Suffolk County previously made towns whole under the Suffolk County Tax Act but that the proposed PILOT arrangement would shift the cost to towns and school districts. He told the board he reported the issue immediately because the timing is urgent and many districts had already adopted budgets that assumed that LIPA revenue would continue.
A staff member explained how the levy would be affected: the board recently approved a levy increase of 2.33 percent, and a 2 percent PILOT cap applied to a large utility would reduce the anticipated revenue growth, producing a one-time loss and a permanent reduction in the levy's growth potential.
Board members compared neighboring districts' projected impacts, as reported by the superintendent: William Floyd (about $300,000), Port Jefferson (about $300,000), Longwood (about $800,000) and South Country (about $1,003,000). The superintendent said town officials had informed some districts earlier and that several districts had relied on expected LIPA revenue in their adopted budgets.
The superintendent said districts were discussing legal options, including seeking an injunction, but cautioned that an injunction might be difficult because the immediate harm described in court papers is to the town rather than directly to school districts. He said the district's business official would attend a follow-up debrief the next day to provide clearer numbers.
The board did not take formal action on the item at the meeting; the superintendent said he would update trustees after the business officials' debrief and following any court developments.
