The New York State Supreme Court has decided that Suffolk County, the town of Brookhaven, and the Shoreham-Wading River Central School District owe a tax refund of at least 456.1 million to the Long Island Lighting Co.
The Oct. 26 decision by Justice Thomas M. Stark is in response to years of challenges by the lighting company to each of the Long Island municipalities' tax assessment on the Shoreham Nuclear PowerStation. Originally, the company sought tax refunds of about $314 million, according to Moody's Investors Service, which issued a report on the court ruling.
In a one-page commentary, Moody's said the decision will hae no immediate impact on the municipalities' ratings but advised keeping an eye on the decision's "longer-term implications." The ruling could still force a downgrade depending on the size of a municipality's future tax liability, the agency said.
Under the decision, the school district would pay $46 of the refund, while the county would pay 30% and town 24%, Moody' said. The ruling covers taxes paid by the power company from 1976 through 1985, with the exception of 1979-80 tax year.
The municipalities are expected to appeal the court ruling, said Brad Gewehr, an analyst for the rating company.
Moody's rates Suffolk Country's and Brookhaven's general obligation bonds Baal. It rates the school district's Gos Ba.
The company is also seeking a tax refund of about $400 million, covering tax payments from 1984 to the present on the Shoreham project, the controversial nuclear power plant never allowed to open for operations.