As TBR News Media reported, Mayor Lauren Sheprow told the Board of Trustees during budget deliberations in April 2026: "We've been absorbing the cost of a glide path from the highest tax paying entity in our village, which is the power plant." She was talking about a number that had already alarmed residents: a proposed 41.16 percent tax rate increase for the fiscal year that began June 1, 2026, built on a 26.64 percent increase in the total amount the village needed to raise.
If you are pricing a home inside the Village of Port Jefferson against one just outside its border, that quote is worth sitting with. The tax line on a village listing is not simply a reflection of what the village spends. It is downstream of a decade-long, contractually scheduled reduction in how much one commercial taxpayer, the Port Jefferson Power Station, contributes to the local tax base. Understanding that mechanism changes how you should read every tax figure attached to a village property right now.
Where the number actually comes from
Treasurer Stephen Gaffga has explained the math to trustees more than once: a shrinking pool of taxable value means the same levy requires a higher rate to collect it. When the village's tentative 2026-27 budget went public in March, the levy increase alone was 26.64 percent, but because the underlying assessed valuation had also fallen, that translated into a 41.16 percent jump in the tax rate itself. For the average residential property, assessed around $671,000, that first draft meant roughly $648 more a year, about $54 a month.
Trustees spent April 7 and April 8 in back-to-back budget sessions trying to bring that number down. By April 17, the Board of Trustees had cut the projected increase to 27.5 percent, trimming the annual hit on that same average home from $648 to $434. The cuts were specific: parking meter rates rose from $1 to $1.50 an hour starting June 1, all five trustees tentatively agreed to eliminate their own salaries for the year, and the board deferred an assistant DPW superintendent position. Deputy Mayor Xena Ugrinsky called the season a "financial correction" tied to prior capital spending and a weakened fund balance, and trustees were still adjusting scenarios as late as an April 24 work session ahead of the board's May 1 statutory deadline to adopt a final budget.
None of that is overspending in the ordinary sense. Gaffga told trustees that $970,000 of the increase came from union contract obligations, insurance premiums, and retirement contributions the village does not control. The harder, slower-moving problem sits underneath those line items.
The glide path, and why it recurs every year
In December 2018, the Town of Brookhaven, the Village of Port Jefferson, and the Long Island Power Authority settled nearly a decade of litigation over the tax assessment on the Port Jefferson Power Station. LIPA had argued the plant, whose four steam turbines date to the late 1940s and 1950s, was running so rarely, only 11 percent of the year in 2017 by LIPA's own account, that its $32.6 million assessment was inflated. The settlement cut that assessment roughly in half, down to $16.8 million, phased in over nine years starting with the 2017-18 tax year. Village attorney Brian Egan described it at the time as a nine-year "glide path" timed to align with the expiration of LIPA's power purchase agreement with National Grid in 2027.
That glide path shows up in the budget every single year, not just this one. In the 2024-25 cycle, Gaffga pointed out that LIPA's contribution to the village's tax base had fallen by $135,990 that year alone, reflecting roughly a $570,000 drop in the assessed value of LIPA's property. Property taxes fund about 60 percent of the village's general fund revenue, so a shrinking commercial contributor pushes more of that 60 percent onto homeowners, year after year, on a schedule set in 2018. TBR News Media reported that Gaffga told the board that the village exceeded New York's 2 percent state tax cap in eight of the previous nine years, a pattern that tracks almost exactly with the glide path's timeline rather than any single year's discretionary choices.
The practical takeaway for a buyer: this specific pressure has an end date. The nine-year phase that started in 2017-18 runs through roughly 2027, which means the village is near the tail of a known, dated adjustment rather than an open-ended trend. What replaces that revenue after 2027 is genuinely unresolved. Village officials have studied repowering the plant, met with the Finnish turbine manufacturer Wärtsilä about peaking-unit technology, and watched a competing 600-megawatt proposal in Yaphank rise and stall more than once. None of those paths guarantees the plant's future tax contribution returns to anything like its pre-2018 level.
There is one piece of the base actually growing. In a rezoning the village board approved, Beechwood Port Jefferson LLC won clearance to build 77 condominiums on the former Maryhaven Center of Hope site at 450 Myrtle Avenue, a property that had not been on the tax roll at all. Village general counsel Richard Rosenberg estimated the project would bring roughly $1,300 in new taxes per property owner once complete. That is a real, if modest, offset to the LIPA decline, and it is the kind of base-broadening that determines whether future budget seasons look more like 2026 or less like it.
Why the printed rate on a village listing can mislead
There is a second layer to this that has nothing to do with the power plant and everything to do with how New York assesses property. Every municipality assesses homes at some fraction of true market value, called the residential assessment ratio, and that fraction varies enormously from one village to the next. Current estimates put Port Jefferson Village's ratio somewhere under one percent of market value, while the Town of Brookhaven's own town-wide ratio sits at 0.74. Nearby incorporated villages assess very differently again, with figures for places like Bellport and Patchogue running several points higher on the same scale.
What that means in practice is that the tax rate printed on a listing, expressed as dollars per unit of assessed value, cannot be compared across municipal lines without knowing each one's ratio. A village home assessed at a tiny fraction of its market price will show a much higher-looking rate than a town-assessed home of equal market value, even though the two owners might write very similar checks. Comparing a Port Jefferson Village listing to one in Port Jefferson Station, Belle Terre, or Stony Brook by rate alone is not really a comparison at all until someone adjusts for that ratio.
The school district portion tells a more encouraging story on its own terms. The Town of Brookhaven's official 2025-2026 rate sheet lists Port Jefferson Union Free School District at a valuation rate of 217.706, compared to 309.162 for Mount Sinai, 312.848 for Miller Place, 330.796 for Rocky Point, and 324.238 for Three Village. Whatever pressure the village's own tax rate is under from the power plant, the school tax that rides alongside it has consistently posted among the lower figures on that same North Shore list.
What this means before you write an offer
A tax bill on a village home right now reflects two things stacked on top of each other: a temporary, dated squeeze from a declining power plant assessment that has a known end point around 2027, and a structurally low assessment ratio that makes the printed rate look sharper than a direct dollar comparison would support. Neither one tells you the house is a bad value. Both mean the number on the listing sheet is not the number to act on without context.
Anyone weighing a village purchase against a comparable just outside the line should ask to see the actual current assessment and the full tax bill breakdown, not just the headline rate, and should factor in that the power plant pressure is scheduled to ease rather than compound indefinitely. The Village Treasurer's Office at Village Hall on West Broadway publishes the assessment roll and can walk through how a specific parcel's numbers were built.
Straight answers before you write an offer
Will Port Jefferson Village taxes keep rising at this pace every year? The recent run of increases traces to a nine-year LIPA settlement that phases out around 2027. Once the glide path concludes, the pattern depends on what replaces the plant's tax contribution, which remains unsettled.
Is a home in Port Jefferson Station actually cheaper, or is it just outside the village line? Both factors are at work. Port Jefferson Station sits outside the incorporated village, so it does not carry the village's own tax layer or its glide-path exposure, and it also carries a different assessment ratio than the village does, which affects how any printed rate compares.
What happens to village taxes after the LIPA agreement ends in 2027? That is still an open question locally. Village officials have explored repowering the existing plant and have watched competing regional power proposals stall and revive, but no settled plan yet replaces the revenue the plant historically provided.
If you are comparing a specific address inside the village against one just over the line, the tax mechanics deserve their own conversation before an offer goes in, not an assumption based on a headline rate. SERHANT. Port Jefferson can walk through what a given parcel's assessment and village tax history actually mean for your monthly number, side by side with any home you're weighing outside the line.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
