The Huntley Station, Erie County's largest taxpayer, is getting a multimillion-dollar tax break as part of a deal officials say will guarantee the troubled power plant's future in the Town of Tonawanda.
Ending a long legal battle that raised deep concern about the fate of Tonawanda's tax base, Huntley will see its estimated $15 million tax bill cut over five years -- starting in the 2001-2002 fiscal year -- by more than 25 percent, to $11 million.
The tax will remain at $11 million through 2008.
The Kenmore-Town of Tonawanda School District will take the biggest hit, since it receives 60 percent of Huntley's tax bill, and will therefore take 60 percent of the loss. That will amounts to more than $2 million to the school district.
"I think every taxpayer in the district should be concerned," said Ken-Ton trustee Joseph Salamone. "When you start thinking about the reality, you have a big hole. How do you make it up?"
However, the officials who crafted the agreement said phasing in the cut will give the school district and local governments time to prepare, and emphasized that the pact will not only keep the aging plant open but help its new owners, NRG Energy, upgrade it. They also said the Erie County Industrial Development Agency will provide a package of incentives to help NRG Energy retool.
NRG agreed to put in $50 million in upgrades and anti-pollution equipment, none of which will be subject to sales tax or additional property taxes.
In addition, NRG is considering the Tonawanda plant as one of its sites in the country for steam production, a move that would considerably increase the plant's value in the future.
The aim was to help make Huntley "competitive and viable," ECIDA Executive Director Ronald Coan said.
He said it was the best way to help Tonawanda's tax base, which has been stagnant over the years.
Huntley now pays $14.8 million in taxes to Erie County, the Town of Tonawanda and Ken-Ton schools.
Next year, Huntley would pay at most $13.5 million. The following year the payment would drop to $12.7 million, then $11.9 in 2003-2004 and $11 million in 2004-2005.
Huntley paid about $9.4 million in school taxes on its most recent bill, according to the Town of Tonawanda tax receiver's office. Ken-Ton's total tax levy for 2000-01 was $58.3 million.
The Town of Tonawanda meanwhile, received about $3.4 million and the county, about $2.1 million.
"It is the only way we'll be able to ensure the long-term tax viability of Tonawanda," Coan said.
Erie County Legislature Chairman Charles Swanick said, "Yes, there is some pain involved" for the county, town and Ken-Ton because of their reliance on Huntley for tax dollars.
"Those entities are going to have to adjust their budgets," Swanick said. "But this is a win-win for everyone. This ensures the future."
The pact caps a long period of anxiety over the future of the coal-burning power plant on River Road. The worrying started in the early 1990s, when Niagara Mohawk began a legal fight to reduce its $230 million assessment and grew worse when the plant was sold not long ago.
Huntley is the county's largest single taxpayer, in part because state law requires that the assessment of power plants be based on both the property involved and the amount of power generated.
Swanick said the new deal will end the bitter legal fight, in which Huntley had demanded a 40 percent cut in its assessment and refunds for past payments that could have totaled another $62 million.