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AES tax break gives pause to GOP

The public criticism of the property tax break being given to the AES Corp. power plant in Somerset is making some members of Republican-led majority in the Niagara County Legislature a little nervous.

The closer they are to the power plant, the more worried some legislators are that voters may take out their displeasure with the tax break on them.

Legislator Michael E. Hill, R-Hartland, has consistently opposed the payment-in-lieu-of-taxes deal the county Industrial Development Agency made with AES on Oct. 27.

But he said he is still worried about the political fallout against him and Legislator John Syracuse, R-Newfane. Between them, they represent the Barker Central School District, which derives about three-quarters of its tax revenue from AES.

"If [voters] were looking to hold someone accountable, it would probably be us," Hill said. "They can't vote for the IDA members."

But lawmakers from western Niagara County took the controversy in stride. Legislator Peter E. Smolinski, R-North Tonawanda, voiced support for the AES tax break.

"We had to do what we had to do. They were overtaxed," he said.

Legislator Danny W. Sklarski, a Town of Niagara Democrat who caucuses with the Republicans, said he could see the issue hurting some members of the majority caucus. But he added, "I don't think it will be a political liability for Danny Sklarski."

"I don't think people in Niagara Falls are fully aware of the issue," said Legislator Jason J. Murgia, D-Niagara Falls, who also votes with the GOP.

"The part that would be the political liability would be if all the county taxes go up," said Legislature Vice Chairman Clyde L. Burmaster, R-Ransomville.

The Legislature appoints the IDA board and can dismiss its members at any time. But Legislature Chairman William L. Ross, C-Wheatfield, said Friday that no legislator has approached him to discuss making changes on the board because of the AES deal.

The tax break is projected to cost the county, the Town of Somerset and the Barker Central School District at least $40 million in lost tax revenue from 2008 to 2019.

Ross called for a "summit" between legislators and the IDA board. IDA Chairman Henry M. Sloma declined to comment on that.

Ross said, "You can't turn your back on a problem of this magnitude that's going to affect the county for years. . . . Henry's got to remember, he's appointed by this County Legislature. There's no permanence to those positions."

AES, which has long battled Somerset in court over its property assessment, sought the tax break on the grounds that it needed to reduce its costs before bidding for a "clean coal" power plant construction contract the state was offering.

AES lost that bid to NRG Energy's Huntley Station in the Town of Tonawanda, but it still has the 12-year tax break.

Legislator Gerald K. Farnham, R-Lockport, said that unless the tax break is revised, it will "absolutely" be a political liability for the GOP in the 2007 elections.

Farnham said, "Unless somebody can tell me something I don't understand, I think the whole thing's a joke. For the taxpayers, us that are left, that [deal] will be a burden."

e-mail: tprohaska@buffnews.com

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