The Long Island Power Authority (LIPA) held rate-hike hearings yesterday in Nassau and Suffolk.
As part of LIPA's justification for a 1.5 percent rate increase next March, LIPA cites a $51.7 Million increase in the property taxes they must pay. Property tax increases are the largest factor cited for the LIPA rate increase, compared to a $25 million investment in future energy efficiency improvements, plus recovery of $6 million spent due to storm damage, and $24.4 million increase in electric grid management fees paid to National Grid.
The $25 million investment will have a payback because it will improve efficiency and develop renewable energy capacity for the future. The storm damage is sunk money which needs to be recovered to balance LIPA's budget. The National Grid fees are part of that murky category known as "contractual obligations" which is terminology very familiar to anyone who follows their school district's budgeting process.
But that whopping $51.7 Million in property tax increases has no payback or other tangible benefit for us, LIPA's electric rate payers. It is really a double-tax on homeowners and businesses across the island.
But hold on a minute! If LIPA's using increased property taxes to justify electric rate increases were simply "double taxation", then this blog would be mis-labeled. The title, "Round and 'Round and 'Round..." is more accurate than double-taxation, however.
Just as this year's property taxes will drive-up next year's electric bills on homeowners, so will next year's electric rate increase drive-up your school district's electricity costs...and your property taxes, along with LIPA's property taxes the following year...
...which will come 'round again in the form of another LIPA rate increase the year after that, driving up your property taxes yet again...and so-on and so-forth.
I think Long Island is intoxicated with taxing ourselves over and over and over again!
Chris Wendt can be reached at email@example.com