MONTICELLO, NY — The people have spoken: the families of care center residents, the staff, others watching. 

For the county, it is also about the numbers that reflect COVID-19-related shortfalls, statewide legislation, the way Care Center at Sunset Lake funding and reporting was set up and the financial problems of nursing homes in general. 

However, the situation is in some ways temporary. Eventually, county funding will recover, and while that won’t fix the losses at the care center, at least county residents will know what’s at stake and can decide on their priorities.

First, the numbers

 Sullivan County subsidizes the Care Center at Sunset Lake to the tune of $6.2 million, said county manager Josh Potosek.  That doesn’t count payroll, at $13.6 million.

“What people fail to mention is that it’s a county subsidy that we have to budget for,” he said.

The numbers are impacted by the fallout from coronavirus lockdowns: the loss of sales tax and the loss of casino money that has helped keep the government going for years. Even federal and state aid is up in the air.

As things stand now, “our revenue base can’t support it going forward,” Potosek said.

He said the $6.2 million is an annual cost; $3.5 million is a shortfall, with expenses greater than revenue, and that could increase given Medicaid cuts and lower occupancy; and $2.7 million is the county’s match for intergovernmental transfers (IGT) so the center can get federal aid. 

While the care center “received $5.4 million in revenue, the county general fund had to put up 50 percent [$2.7 million]  of the total IGT revenue as a match,” Potosek said. The revenue is “received directly by the nursing home and is part of the $3.5 million loss.” So is staff benefits and pensions. 

What gets funded by the county reflects priorities, and right now, services that may have been fundable in better times are at risk. Running a nursing home “is not a mandatory function of county government,” Potosek said. So it’s something to consider when you need to cut. But “we do want the service to continue.” 

The past is always with us

A simple story has easy-to-spot heroes and villains. This isn’t a simple story, and part of what’s shaping the discussion now is both state-level decisions and choices made 30 years ago.

Take, for example, the two-percent tax cap. The tax cap restricts the total amount of the levy. It was put in place to control New York’s skyrocketing property taxes and make the state more attractive.

But it also creates a circuit breaker, slowing the addition of new programs that would need those taxes. 

The cap can be overridden; “six of the nine legislators would have to vote to override the cap,” Potosek said, “depending on a multitude of issues, but increasing losses at the nursing home would likely result in having to override frequently.” 

Another part of the problem is that, in the 1990s, the then Sullivan County Board of Supervisors set the then Adult Care Center up as a special revenue fund, Potosek said. It’s an enterprise fund, operated like private enterprise in that it has to specify revenue earned and expenses incurred to ensure accountability.

This makes problems immediately apparent. Arguably, it also puts those line items under more of a microscope than others because they’re more visible. However, “the real intent at the time was for the facility to collect revenue to at least match expenses,” Potosek said.

And of course the losses

Losses are common in nursing homes, especially in the last 20 years, and a Leading Age study found that 550 homes, public and private,  nationwide closed between 2015 and 2019. It’s all about finances; Medicaid pays for long-term care and reimbursements are famously low. So homes try to make it up with Medicare-funded services like rehab, or by bringing in more private-pay residents.

Making matters worse, Medicaid has already been cut twice since this winter, Potosek said. 

At the care center, he said, you have to add in county benefits, too. Family health insurance costs $28,000 a year (although staff pay part of that cost). There are pensions.  “In normal economic times, we could accept this,” he said.

These are not normal economic times, but they aren’t likely to be permanent, either. After the recession of 2008, it took seven years for sales taxes to recover, county treasurer Nancy Buck has reported, and sales tax makes up the county’s second-largest revenue source after (capped) property taxes. Some business is booming now, but not everyone has opened fully, or even at all. 

So something has to be done “till sales tax catches up,” Potosek said.

What options are there? 

The nursing home can, of course, be sold to a private owner. Nursing home care is “their core mission,” Potosek said. “We have 50 core missions that we’re trying to serve.”  The upside for the county is that it—and the $3.5 million annual loss—is off their hands for good and the money from the sale can go to other needs. The downside is that studies have repeatedly shown that the quality of care in a privately-owned nursing home is poorer than in a public home. 

If you’re interested, start here.

If county residents make it clear that keeping the care center matters to them, then what? 

Taxes could be raised to cover the care center’s costs. Different numbers have been tossed around but, Potosek said, “$3.5 million represents 5.27 percent of our levy.  $2.7 million represents 4.07 percent of our levy.  So, together, almost 10 percent of our levy.”

Could the care center become its own district, like fire districts or schools, responsible to the taxpayers who vote on it and taking responsibility for its own finances? “I don’t think the state allows that,” Potosek said.   Even if it did, the new district would fall under the two-percent tax cap.

Other areas of the budget could be cut, and the county has been focusing on this. Further layoffs would result and other services might be cut or lost.

In the end, maybe, it comes down to priorities. What do we value? Whether it’s caring for the frail or lower taxes, those cases need to be made, the consequences laid out, and those with opinions need to tell their legislators.