• Editorial: Link any tax subsidy to Danskammer power plant profit

    • email print
  • About a year ago, the Danskammer power plant in the Town of Newburgh was an outmoded facility made inoperable by Hurricane Sandy, worth whatever scrap dealers would pay for its carcass.
    Then a new pricing plan for producing electricity was announced. It was designed to attract power companies to this region, where an increase in demand for power is predicted, by letting them charge more.
    Those who were interested could build a plant but any profits would be delayed by the time it takes to design facilities and go through the necessary regulatory steps. Or, a company could take over a plant already in the region but not working.
    All of a sudden, all of that rust on the Danskammer plant turned into gold.
    The plans to fire up the boilers have already overcome a number of obstacles, including opposition from others who want to take advantage of these higher rates and people concerned with the prospect of pollution depending on what the plant burns.
    Now, the main question remaining seems to be how much the plant will pay in taxes, and even that seems to be on its way toward a resolution following a meeting this week before the Orange County Industrial Development Agency.
    Municipalities and the Marlboro School District want to get as much as they can from the new plant, and the owners want to pay as little as they can get away with. Most hearings on requests for tax subsidies are like that.
    The IDA board operated much like a mediator at the hearing, encouraging the two sides to talk some more, hoping that eventually they will come up with figures that both can live with.
    But the IDA could, and should, do much more. It is not a mediator, it is the representative of the people and businesses who live in the region, most of whom pay all of the taxes they owe without any chance to get a discount or bargain.
    While the Marlboro School District might seem like an independent party in all of this, it has a lot of silent partners who do not seem to have any representation at these meetings.
    When the Danskammer plant was paying a large tax bill, Marlboro was able to keep its school budgets in check. When that payment plummeted, the schools had to cut expenses and raise taxes. But because that was not enough, it had to go to Albany two years in a row for multimillion-dollar bailouts to balance the books.
    Those who think that the plant operators can pay more than they want to are skeptical about projections of income and profits.
    A fair plan to make everybody whole would take all the money into account, would tie subsidies granted today to future earnings and raise payments accordingly, would get the plant owner’s job and spending promises in writing and impose penalties should the performance not match the estimate.
    The Danskammer plant is not going anywhere and the owners have already calculated that this is a great investment. The IDA should be representing everyone in the county and working to maximize tax payments.
Reader Reaction