By John Cloutier and Gary Merchant
By John Cloutier and Gary Merchant
We are committed to finding a fiscally responsible solution that meets the needs of nursing home residents, staff, and patients undergoing rehabilitation without exceeding the means of Sullivan County taxpayers.
Previous meetings of the Sullivan County Delegation have considered multiple options:
Option 1: Exit the elder care business entirely and close the nursing home (there is no state mandate that the county provide a nursing home facility).
Option 2: Construct a new nursing home facility.
Option 3: Renovate the existing nursing home facility.
Option 4: Combine new construction with renovation to upgrade the existing facility.
Option 5: Decrease the scope of the proposed project to reduce its budget requirements.
Option 6: Continue using the existing facility and address whatever building issues arise over time.
On Friday, April 23, the county’s executive finance committee, in a bipartisan 4-1 vote, decided not to support the county commissioners’ request to move forward with Option 4, a combination of new construction and renovation that would require a $40 million bond. Based on this decision, the delegation then voted on Monday, April 26, to defer any further action on seeking a bond. The majority felt that the County’s fiscal environment had not changed much since it last voted 11-1 against the proposed project in September last year.
The decision to defer further action for the time being carries little risk. RBC Wealth Management’s forecast of U.S. Treasury rates shows that they are expected to remain low for the near future. Furthermore, Attilio Rivetti, vice president of Turner Construction Company who is responsible for compiling the Turner Building Cost Index, which measures costs in the U.S. non-residential building construction market, reported that “aggressive competition for available work is offsetting material price increases and is keeping overall construction costs relatively stable.” While the county is projected to receive up to $8.5 million through the American Rescue Plan (ARP), these federal funds won’t become available until much later this year. It is also not clear whether this project is eligible to use the funding or what the timeline would be for its use. It cannot yet be assumed that these dollars will serve to reduce the project’s cost to taxpayers.
How the total, collective tax burden of state, county, and local property taxes will impact Sullivan County taxpayers is a significant concern. The state budget as proposed by the governor and passed by the House will hike local taxes substantially. Charlestown, Claremont, and Newport stand to lose millions of dollars in education funding. Local tax payers will have to fill that gap. The proposed budget also does not fund the state’s existing commitments for sewer and water projects, reduces revenue sharing from rooms and meals taxes, and makes other cuts in services that will result in still more downshifting of costs to municipalities. The bottom line: further increases in local property taxes.
The EFC and county commissioners will shortly begin the process of creating a county budget for the coming fiscal year. Over the past few years, the budget has drawn funds from the county’s rainy day account, known as the “fund balance,” to avoid increasing the county portion of the property tax burden. Unfortunately, the fund balance can no longer provide tax relief and still maintain the minimal amount of reserves necessary to fund unforeseen operational expenses. This alone means Sullivan County taxpayers will face higher taxes. Coupled with the nursing home project’s costs, the county tax rate would grow even more.
Municipalities are already dealing with financial stressors related to COVID, red-listed bridges and infrastructure projects, and the impact of lower state funding. Put all these expenses together, and they present a huge tax burden for the people in our county, many of whom are on fixed incomes or just getting back to work as the pandemic crises eases.
We believe the delegation will ultimately meet the needs of our nursing home residents. One that will provide an energy-efficient building that satisfies safety standards and enables staff to maintain a high quality of care. To do so, a careful, responsible examination of office spaces, open areas, and other non-residential spaces must be undertaken. We must keep the total number of rooms in line with anticipated occupancy to reduce the project’s overall cost.
As strong proponents of tax relief, we favor forming a new, non-partisan committee to undertake this analysis. Key stakeholders, including members of the delegation, county commissioners, nursing home staff, residents and their families, and community leaders would participate. The committee would make a recommendation to the delegation and county commissioners that incorporates fiscal responsibility, outlining exactly how the project, including bonding, would affect the tax burden for our citizens, especially those trying to manage in communities already saddled with very high tax rates. The committee would take the time to look at the proposed project in terms of expense reduction, research the possibility of obtaining additional Federal funds, and consider using an Economic Opportunity Zone.
Now is not the time to launch into a project many of our citizens can ill afford. It is time for the county commissioners and the delegation to come together to collaborate on achieving a common goal — providing an up-to-date nursing home facility in a fiscally responsible way.
John Cloutier is chair of the Sullivan County Delegation and representative of Sullivan County’s District 10. Gary Merchant is representative of Sullivan County’s District 4.
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