Report: Taxpayer Subsidies Cover Depleted Fund Balance

The financial state of county-owned nursing homes trickles down to the taxpayers.

According to a recent report on county-owned nursing homes in New York state by the Centers for Governmental Research, taxpayer subsidies have increased as homes have suffered higher losses.

Ron Johnson, Democratic candidate for county executive and a businessman who has a background in adult homes, said he can turn the County Home around to where it needs to be to be sustainable.

“It bothers me that we would sell an asset and not deal with the structural problems, our budget structure and our structural problems with the budget in the county,” Johnson said. “We don’t deal with it the same way that you sell the County Home, but you still have a continuum of care. Are we going to stop caring for people in the county? No, we aren’t. So, it doesn’t solve the problem. To sell the assets, then we have $16.5 million to put in next year’s budget, it doesn’t help anybody. It’s a bad use of our assets (to sell the home).”

Of the county officials responding to questions by CGR, 29 percent reported subsidies of $1 million or less for county homes; 29 percent between $1 and $4 million; and 17 percent up to $7 million. CGR said more than a quarter of county officials did not respond to the question.

As part of the survey process, CGR looked at audited financial reports, only to find “significant inconsistencies” in terms of how county contributions to their homes were recorded, and the extent to which any contributions were made from a given year’s tax levy, as opposed to contributions from a county’s general fund.

CGR also found county matches for IGT funds were not recorded in any financial statements about nursing homes, since they came from county general funds and not nursing home enterprise funds. It did find that, at some point, the taxpayers become responsible for payment of the fund balance.

“Even though county officials may choose in a given year to “charge” a nursing home shortfall in revenues against the nursing home fund balance, rather than against the county general fund or tax levy, at some point the bill comes due to the taxpayers, as the fund balance becomes depleted,” the CGR report states.

Current County Executive Greg Edwards said he is glad the CGR report found what he has been saying to be true.

“I’m very, very happy to read the very clear, no-nonsense statement: It’s a fact, IGT is tax dollars,” Edwards said. “It really flies in the face of these people who get up every meeting and state that the County Home isn’t losing money. Well, it is, because it takes direct taxpayer subsidies to keep it operating. That’s much different than say, the Sheriff’s Department, because we have to have a Sheriff’s Department. It’s much different than the (Department of Public Facilities), because we have to plow our roads. There’s no option to privatize those. In this particular case, there’s no mandate to provide skilled nursing. With Medicaid payments available to everyone, it’s no longer required to be a government activity, because that’s what 89 percent of the population that are in privately owned homes, they receive Medicaid and Medicaid payments. For all those reasons, I was very, very encouraged that they stated that so clearly.”

Vince Horrigan, who is the Republican candidate for county executive and a current county legislator, has voted several times in favor of selling the Chautauqua County Home. One of the reasons he is in favor of the sale comes down to the taxpayers.

“According to the independent nonpartisan tax foundation, Chautauqua County ranked eighth in our nation in 2010 – the latest data available – as having the highest property tax rate as a percentage of median home value,” Horrigan said. “We must make tax relief a top priority in order to stop the loss of businesses and create new jobs in Chautauqua County. We all get an earful on the high property taxes. I believe that the majority of legislators do what they can to reduce the tax burden on Chautauqua County residents. We have had two votes on privatizing the County Home. One vote had a majority of legislators ready to sell to a proposed buyer but failed the required supermajority by one vote. The second vote did succeed in a supermajority of voters who voted to privatize providing we found the right buyer. There is no doubt in my mind that a majority of Chautauqua County taxpayers do not want to pay to subsidize the County Home.”