09.17.15

SCHUMER LAUNCHES PUSH TO SECURE CRITICAL FED FUNDING FOR LONG-TERM ECONOMIC PLANNING FOR TONAWANDA; DIMINISHING PRODUCTION AND POSSIBLE CLOSURE OF LOCAL HUNTLEY POWER PLANT HAS FORCED TOWN & SCHOOL DISTRICT – WHICH RELY ON TAX REVENUE FROM THE PLANT – TO LAY OFF TEACHERS, CLOSE SCHOOLS & CUT PUBLIC SERVICES

University Of Buffalo’s Regional Institute Has Joined Local Environmental And Economic Development Organizations To Help Design Long-Term Economic Plan For Town Of Tonawanda To Better Ensure Regional Financial Stability And Protect Jobs 

Huntley Generating Station Plant Has Been An Economic Anchor in Tonawanda For Years, But Decreased Demand & Increased Coal Costs Have Slashed The Plant’s Output – The Town Has Lost Nearly 50% Of The Plant’s Tax Revenue, Which Has Forced Tonawanda To Cut Services & Close Two Schools; NRG Recently Submitted a Plan to Fully Retire the Plant as of March 2016. 

Schumer: Green Light Fed Funds Necessary to Craft a Plan to Secure Tonawanda’s Financial Future 

U.S. Senator Charles E. Schumer today launched his push to secure federal funding to study ways to better ensure the financial stability for the Town of Tonawanda. Schumer explained that the University of Buffalo’s Regional Institute (UBRI) recently applied for funding through the 2015 Economic Development Administration’s (EDA) Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative to determine a long-term plan to address the Huntley Station’s slowdown in production, and possible impending closure.

Schumer said this coal-fired power plant in Tonawanda has continually diminished its output over the years due to increased coal costs and decreased demand. As a result, the town’s tax base has taken a major hit in recent years. Schumer said last year, the town was forced to cut many services and the local Ken-Ton School District was forced to close two schools and lay off more than 100 teachers. While it still serves as a source of employment for 75 local workers, the workforce has been reduced significantly over time, and NRG recently announced a plan to retire the plant as of March 2016. Therefore, Schumer said UBRI is looking into ways to partner with the federal government to begin a plan for economic transition in the Town of Tonawanda. Schumer said the EDA POWER Initiative presents the ideal opportunity to utilize federal funding to generate alternative funding sources and job opportunities, and to begin implementing a course of action.

“The Huntley plant’s reduced operations has diminished tax revenue for the Town of Tonawanda and the Ken-Ton School District, and the total loss of tax revenue will hurt area residents, businesses, and even students. As a result, teachers are losing their jobs, schools are shuttering their doors and town services are in danger,” said Schumer. “What Tonawanda needs now more than ever is a comprehensive economic plan to help determine its future – and that is why I am urging the federal Economic Development Administration to approve UBRI’s application to study how we can better ensure Tonawanda has a strong financial standing for generations to come.”

The Huntley Generating Station has remained operational in Erie County for nearly 100 years. Throughout that time it has remained a staple along the shoreline of the Niagara River. For years, coal served a suitable form of energy but increasing production costs and low natural gas prices have paved the way for alternative energy sources. Schumer said, however, the Huntly plant’s diminished operations has led to a loss of revenue, and by extension decreased tax revenue, for Tonawanda. This has produced broader negative impacts for the community and a comprehensive analysis of the Huntley Station’s local and regional impacts would determine solutions and opportunities to support the long-term economic future of Tonawanda and the Western New York region,

Schumer said the high cost of coal production and decreasing energy demands has forced the Huntley Generating Station to reduce their operations and workforce. A 2014 report by the Institute for Energy Economics and Financial Analysis found that the Huntley plant was losing $3 million annually due to decreased coal consumption. Although the plant was paying over $4 million in taxes to the Town of Tonawanda in 2009, it was placed on a Payment in Lieu of Taxes program in 2012 and revenues to the Town reduced to $2,246,256. Between Payments in Lieu of Taxes and tax revenue, the plant now pays about $6.1 million total to the county, town and school district, down from $13 million in 2003.  In order to account for the loss in revenue, the Town of Tonawanda and the Ken-Ton School District have been forced to make a number of difficult financial decisions, such as laying off 133 teachers, closing two schools, and making substantial cuts to the Town Budget.

Schumer said that, in light of these cuts and the announced plan to retire the plant, a comprehensive economic development plan should be initiated for Tonawanda. UBRI requested EDA funding to prepare a comprehensive analysis of the Huntley plant’s future in Tonawanda. UBRI has consulted with the Clean Air Coalition of Western New York, Western New York Area Labor Federation, the Town of Tonawanda and other regional partners in their application for federal funding. This study would allow regional and local officials to determine the plant’s future. Schumer said this study would not signal the end of the plant, but rather provide a clearer picture of how the town would need to revise future budgets to account for diminished tax revenues from the plant. Schumer said the study will also address the future employment and job security of the 75 workers currently employed by the plant. 

The funding will be distributed through the EDA’s Partnerships for Opportunity and Workforce and Economic Revitalization Initiative, which seeks to fund economic development planning projects. The initiative seeks to grant funding to a wide range of local economic development leaders, such as local governments, regional planning organizations, workforce agencies, and leading research and education institutions.

A copy of Senator Schumer’s letter to the EDA appears below:

Dear Assistant Secretary Williams:

I write today in support of the University at Buffalo Regional Institute’s (UBRI) application for funding through the 2015 Economic Development Administration’s Power Plus Plan. UBRI is applying on behalf of a range of regional and local partners committed to sustainable and comprehensive economic development planning. This project is also supported by the Kenmore Teachers Association, the Clean Air Coalition of Western New York, the Area Labor Federation of Western New York, and the Town of Tonawanda.

Understanding the particular impacts and potential strategies to address continuing diminished output at the Huntley Generating Station coal-fired power plant will be critical to planning for Tonawanda’s economic future. The Town of Tonawanda and the Ken-Ton School District have relied on the tax revenue from the Huntley coal plant for decades. As the plant’s output has decreased, there have been major impacts on the local school district. As of 2009, the plant was paying over $4 million in taxes to the Town of Tonawanda, but was placed on a Payment in Lieu of Taxes program in 2012, reducing tax revenues to $2,246,256. Between Payments in Lieu of Taxes, and tax revenue to the county, town and school district, the plant now pays about $6.1 million, down from $13 million in 2003. Due to this reduction, the district has been forced to lay off 133 talented teachers, and to make tough financial decisions. Last year, the district was forced to close two schools, and many non-mandated services, such as art and athletics, are now at risk. The Town of Tonawanda has also faced reduced revenues.

As operations decrease, so does the workforce at the plant. The workforce has been reduced over the past few years, but 75 workers still support their families working at Huntley. These are good-paying, union jobs, and these workers who lose their jobs due to decreased operations need and deserve a plan to ensure that after years of service to one employer, they will be able to find work.

It is vital that the community, in partnership with the federal government, begin to plan for a transition. I am a firm believer in community-driven planning and am confident that given the University at Buffalo Regional Institute’s strong economic development expertise and community ties make them the right partners to lead this initiative. The community needs a strong economic development plan to compensate for the lost jobs and tax revenue, and I wholeheartedly support UBRI’s application.

Sincerely,

Charles E. Schumer

United States Senator

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