By a narrow vote, the Niagara County Legislature on Tuesday asked the Industrial Development Agency rescind a payment-in-lieu-of-taxes agreement with AES Somerset.
Though largely toothless, the move was a surprising one, considering that the GOP-led majority caucus appoints the board and had not voiced the depths of its concerns with the PILOT before Tuesday.
Voting in favor of urging the IDA to cancel the PILOT were Legislators Sean O’Connor, D-Niagara Falls, Kyle Andrews, D-Wilson, Harry Apolito, D-Lockport, Rebecca Cuddahee, D-Niagara Falls, Gerald Farnham, R-Pendleton, Renae Kimble, D-Niagara Falls, Danny Sklarski, D-Town of Niagara, John Syracuse, R-Newfane, Dennis Virtuoso, D-Niagara Falls, and Michael Hill, R-Hartland, who sponsored the resolution.
Legislator Malcolm Needler, R-North Tonawanda, abstained.
Farnham called his vote a “message”, noting that the Legislature has no legal authority to force the IDA to act.
An overflow crowd packed into the Niagara County Courthouse on Tuesday, concerned about how the Legislature would handle the tax-break agreement for the power plant on the northeastern end of the county.
But the crowd, the members of which represented both sides of the issue, was late.
The payment-in-lieu-of-taxes agreement between the county’s IDA and AES Somerset was already signed, sealed and delivered to the offices of the county clerk and the Town of Somerset on Friday.
The filed application makes the Legislature’s request of the IDA to rescind the PILOT that much more ineffectual.
The Legislature also called for the formation of a consensus committee to revisit the PILOT so it is amenable to all parties.
Lawmakers on both sides of the aisle weren’t happy the PILOT was finalized before Tuesday’s meeting and some called for the resignation of IDA Chairman Henry Sloma, who was not in attendance.
“It’s a slap in the face to the Legislature,” said Minority Leader Dennis Virtuoso, D-Niagara Falls.
Legislator Michael Hill, R-Hartland, agreed.
“I have never felt more disrespected as a legislator and as a citizen as I do right now,” Hill said on the floor of the Legislature.
Though a measure to rescind the PILOT passed, a motion to fire Sloma did not.
The PILOT has been a source of contention among the IDA, the Legislature, the residents of Somerset and the Barker School District, and the dispute was no more apparent than on Tuesday, when numerous supporters of AES and residents who oppose the agreement flooded the Legislature chambers.
The PILOT allows AES to pay a set amount every year for 12 years beginning in 2008. Over 12 years, the power plant will pay $192 million in taxes to Niagara County, the Town of Somerset and the Barker Central School District.
Special district taxes are also paid out of the PILOT payments, which change every year, meaning that if they go up, less money will be available to divide among the three taxing jurisdictions.
If inflation is not counted, $14.4 million will be “lost” by Niagara County over the 12 years of the PILOT; Somerset will lose $3 million and the Barker Central School District will lose $23.5 million, according to estimates of the school district and the county.
The PILOT eliminates AES’s assessment changes, which the company has said have been unpredictable and have made it reluctant to invest.
The PILOT will stabilize jobs and allow AES to make $100 million in new investment, according to AES Somerset President Kevin Pierce.
“This PILOT agreement gives hope for Niagara County,” Pierce said.
Critics of the PILOT have said AES Somerset is highly profitable and does not need special accommodation from the county to stabilize its tax bill. They are also concerned that the PILOT will shift the tax burden from the plant onto everyone else, especially residents of the Barker School District, who will see their tax bills rise the most unless other economic changes take place, such as cuts at the district or a growth in the tax base.
The plant is proposing a $20 million port for ships and a wind farm, which will cost between $60 million and $70 million.
While the wind farm will create “minimal” jobs, Pierce said, its operation will stabilize the jobs at the power plant.
The plant employs 149 people.
AES has taken out advertisements in this newspaper thanking the Legislature and the IDA for its support and announcing that the company will pay for one-time $1,000 college scholarships for Barker High School graduates.
“For too long Niagara County has suffered in an economic environment that has fostered decline,” said John Benoit, chairman of the Niagara USA Chamber, before the Legislature took action. “This is a signal that we will do what it takes.”
Organized labor also showed their support for the PILOT, including the union that represents AES employees and Laborers Local 91.
“We work in a volatile industry,” said Brian Beakman, president of IBEW Local 966. “Today though we have hope for the future.”
After the Legislature’s three-hour meeting, Farnham admitted that with the PILOT filed, AES has little incentive to negotiate anything. Nevertheless, he hopes the Legislature’s call for a consensus committee will force the minds to come together.
By Jill Terreri
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