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WHAT IF THE HUNTLEY POWER PLANT SUDDENLY DIDN'T PAY TAXES?

Here are some significant facts about the Huntley Steam Station, a prime generator of electric power for Niagara Mohawk:

It represents about 12 percent of the total Town of Tonawanda tax base, a huge slice of the property tax load.

It's the largest taxpayer in all of Erie County, kicking in $14.4 million a year in school, town and county taxes.

Its assessment is constantly under court challenge by Niagara Mohawk.

It's going to be offered for sale at auction in a new climate in the power industry.

All those points translate into an uncertain outlook for the River Road facility and the governments that have grown used to taxing it.

What if the Huntley Station no longer paid such large taxes, or perhaps shut down and didn't pay taxes at all? What would that do to stable financing of local government and schools? The plant is playing a critical financing role in a first-ring suburban town well recognized for reliable public services.

Town officials are talking confidently, but it's possible there could be quite a jolt down the road for a town government that commonly avoids jolts.

The station is assessed for $235.7 million, but Niagara Mohawk is in court seeking a 40 percent reduction. The assessment is being challenged back to 1990 in cases at various levels.

Erie County government, with a substantial stake in the outcome, is sharing legal costs with the town, giving the defense greater staying power than if the town were in a go-it-alone posture. But a substantial loss in court could produce jolts in the form of tax refunds for the power company and reduced tax payments in the future.

Meanwhile, the nationwide push toward a competitive power market has led to Niagara Mohawk's plan to auction all of its power plants except its share of the Nine Mile Point nuclear reactors. At best, with a successful sale, Huntley will have new owners. Their attitudes toward local taxes are, of course, unknown, but they will be in a new competitive environment that could be unkind to owners who don't fight about money with the taxman.

Town officials, ever optimistic, say some power plants elsewhere have sold for much more than their book value, justifying a hefty assessment. They say Huntley is an efficient operation, well worth continued production under a new owner. But only time will tell whether the plant will continue to carry its heavy tax load of the past, and, if it carries less, how much less.

It's comfortable for a town when a large industrial facility pays a large share of the property taxes, lifting part of the burden from the home-owning citizens. But discomfort sets in when the big payer's contribution is in doubt. An extreme case of what can happen involves Lackawanna and the greatly reduced presence of Bethlehem Steel. Tonawanda faces nothing as extreme as that, but it does have a lot of eggs in the Huntley basket.

There's an extra wrinkle. The Town of Tonawanda has chosen to use a two-tiered tax system with different tax rates for homes and businesses. The tax load is split roughly on a dollar-for-dollar basis between the two groups, but the business tax rates are roughly 50 percent higher than rates for homeowners.

Huntley represents nearly one-third of the business side of the tax base. If Huntley taxes are lost, all or in part, other businesses will be taxed even more to make up the difference unless (a) the town makes unpopular adjustments that hit homeowners, too or (b) government expenses are cut to match the lost revenue.

Pick your jolt.

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