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It will be a long ride Monday to a federal court in Dallas for North Rockland officials who must fight to save what they can of their constituents' pocketbooks. Let's hope the trip home isn't even longer.
Now that the Stony Point Town Board has rejected the final version of the Mirant settlement in an unexpectedly strong 4-1 vote, the fate of the multimillion-dollar tax dispute is up in the air. The legal moves may be the final local chapter in this sorry situation. Will the courts do better by taxpayers in Stony Point, Haverstraw and the North Rockland School District than what was to be obtained in the settlement? Will Mirant, which has caused financial hardship for all Rockland taxpayers by irresponsibly not paying its taxes since 2003, be enriched in bankruptcy?
Or will federal Bankruptcy Judge D. Michael Lynn, and later this month New York State Supreme Court Justice Thomas Dickerson, be able to see beyond the easy claims of overassessment to the complex failure of deregulation and also recognize the history of providing some benefit to communities that host noisy, smoky power plants, especially on the real estate valuable Hudson River shore?
Will the courts see this not as just an issue in a suburban New York state county but one that impacts the entire nation? Much is before the bench here. Deregulation, promised in the 1980s by presidents and Congress as salvation for an energy-hungry nation, has not given consumers new sources of supply nor lowered their rates. Instead, it has put energy at risk, removed long-serving utility expertise from the market, encouraged bottom-line only profit seeking and mismanagement by such companies as Enron and confused consumers who were long used to the protection given by state regulators. Indeed, In New York state, the Public Service Commission has added to deregulation failure by fostering a climate that has encouraged companies to buy utilities, pay too much perhaps, and, not realizing the quick profit they thought they could get, acquiring extreme costs for old infrastructure and then moving toward bankruptcy.
The system wasn't broken, and deregulation seriously wounded it. The future ahead is in ever-escalating costs, a burden for local taxpayers and consumers and inadequate supply. That is the suit of clothing Mirant lawyers will wear in court, and we hope the judges recognize the style.
Once all Rockland had a very reliable energy provider, Orange and Rockland, which produced power at the Lovett and Bowline Point plants at reasonable prices while paying taxes to North Rockland. Now the county is held hostage by a company that refuses to pay its bill, and property owners in North Rockland have been hit hard by an ongoing dispute Mirant has with Haverstraw town and village, Stony Point, West Haverstraw and the North Rockland School District. The company is seeking millions in reimbursement for taxes it claims it overpaid between 1995 and 2003, as well as a massive reduction in its future assessment.
Stony Point's rejection this week of a planned settlement, with only town Supervisor Phil Marino voting in favor of the pact previously agreed to by the other defendants in the challenge, means top officials for those defendants will now have to appear before Judge Flynn in Fort Worth at 9 a.m. Monday. The tax challenge case might now have to be decided by a New York state Supreme Court justice. The municipalities are due before state Supreme Court Justice Thomas Dickerson June 30.
The agreement would have settled the energy giant's tax dispute with a refund of nearly $142 million to the company. An expert hired by Stony Point to review the final pact told the town that the settlement might not be in the best interests of the town, presumably prompting the 4-1 vote. "There's some questions raised. What Stony Point would owe, he thinks, would be less if we let the judges decide," says Marino, referring to Paul Goldman, a property tax appeals lawyer from Albany. Town Board members Tim O'Neill and Stephen Cole-Hatchard have been vocal opponents of the settlement, saying it is not fair to Stony Point taxpayers, and Cole-Hatchard says his analysis of the final agreement came to the same conclusion as Goldman's.
Mirant filed for Chapter 11 in federal bankruptcy court in Texas in 2003, and the bankruptcy case has been before Judge Lynn.
While assessments on Lovett and Bowline Point have been irresponsibly excessive, compounded in particular by Haverstraw's failure to redo 1960s-era townwide reassessment, the fact is that O&R did not challenge the figures nearly as much as Mirant, giving a wink to North Rockland that it was a good neighbor and that it was grateful for permission to site its plants. It could always cover its tax costs through rate filings in Albany.
Not so Mirant, which under deregulation is not a "local" company and has no "good neighbor" tries to North Rockland. It worries about taxes because it seeks to quickly repay investors, and as a national company with perhaps too many fingers in too many pies, is overstretched on its capital. Thus the bankruptcies. Thus the tax challenge. Thus woes for everyone.
Eventually, the tax horror will be settled in North Rockland, where, frankly, residents have underpaid for years. But not the bogeyman that is deregulation.
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