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State budget includes extra $5.4M to cushion impact of Huntley closing

One of the few budget bills that did pass in the state Legislature this week put millions of extra dollars into the coffers of communities that lost tax revenues following the closing of power plants in the Town of Tonawanda and in Dunkirk.

The closure of the Huntley Power Station was cushioned this year by the state's Electric Generation Facility Cessation Mitigation Fund, which provided 80 percent of the nearly $6 million lost in tax revenues by the Kenmore-Town of Tonawanda school district, the Town of Tonawanda and Erie County.

If the governor signs the bill, the amount of future state aid to those three taxing bodies will be increased, said Assemblyman Robin Schimminger, who worked on the legislation with Sen. Chris Jacobs.

The current five-year mitigation program will be restructured and extended to a new seven-year payment schedule, which will provide an additional $5.4 million to the three entities over seven years - approximately $1.8 million additional for the town, $2.7 million more for the school district and approximately $1 million additional for the county.

The 93-acre Huntley Power Station on River Road is owned by NRG Energy, which has no immediate plans for redeveloping the site.

When the mitigation fund was announced, the communities were slated to receive 80 percent of lost revenues in the first year, 65 percent in the second year, 50 percent and 25 percent in subsequent years. The new plan provides 80 percent reimbursement of lost tax revenues in the first year, then drops down by 10 percent each year, with a 20 percent reimbursement in the final year.

The mitigation fund also provides benefits to Chautauqua County, the city of Dunkirk and the Dunkirk City School District, which lost tax revenue because NRG mothballed its the coal-burning power plant there in 2016.

The budget calls for the state to put a total of $45 million into the mitigation fund by 2020, up from $30 million.

Schimminger, D-Kenmore, said he recognized that NRG's closing of the Huntley Plant was a huge issue because the company was one of the largest taxpayers in Tonawanda. He said the fund was created two years ago, but he and Jacobs went to work this past year on a plan to make the distribution more generous.

"The state - the governor - was happy to close a coal plant, so the state has an obligation to the community," Schimminger said. "That obligation can be fulfilled through the mitigation fund, but also by extraordinary efforts to build the town's tax base - to build the revenues lost by Huntley."

He said the revitalization efforts by the state should also look beyond Huntley to other dormant sites in the River Road corridor.

Town of Tonawanda Councilman John A. Bargnesi Jr. said the town had been cutting back its spending for three years in preparation for the imminent Huntley closure and were "thrilled" to learn of the additional funding, which he said will allow the town to breathe a little easier. He praised Supervisor Joseph H. Emminger,  Jacobs, and Schimminger for their work to make it happen.

Emminger told the board earlier this year that he spent a lot of time in Albany lobbying for funds to offset the closing.

"Everybody tells me it will be 10 to 15 years before they get that plant cleaned up," said Emminger last month. "(State leaders) are recognizing that this is a long-term problem."

John Brucato, assistant superintendent of finance for the Kenmore-Town of Tonawanda School District, said the district will be "first in line" to apply for a second year of mitigation funding. But he said the district is being "fiscally responsible" and does not rely on the funding to pay for specific projects or staffing.

"What this is doing for us currently is allowing us to get through a zero percent tax levy limit increase, while preventing the reduction of any programming or laying off any staff," said Brucato.

He said the additional funds will be used to build up the district's capital reserve fund so it won't have to go to the taxpayers for matching funds for future capital projects.

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