Pressure's on nursing home – and the county board

The money-losing Champaign County Nursing Home is going to have to improve its bottom line quickly, or voters won't support a probable property tax increase vote this fall. Soon the nursing home is going to be nearly $3 million in arrears to the county general fund.

Any impartial observer who had sat through last week's Champaign County Board Finance Committee meeting would have left wondering why the county, given its miserable record, still thinks it can run a nursing home without losing money.

The facility is supposed to be self-supporting, especially since voters in 2002 agreed to impose a special property tax to cover retirement costs for nursing home employees. But it continues to lose money so badly that, according to Champaign County Treasurer Dan Welch, the county's general fund has loaned or transferred $2.27 million to the nursing home since December 2005.

And the nursing home plans to ask the county board for another $460,000 in June. That means the facility, already subsidized by the county's taxpayers, will have gotten nearly $3 million in additional county subsidies in less than three years.

That might be fine if the county could afford it, but it cannot. In fact, the financial drain that the nursing home has become threatens the entire county budget. Welch pointed out the general fund should have a $4.2 million fund balance (12.5 percent of annual expenditures) when the fiscal year ends Nov. 30. But he's projecting a scant $1.3 million balance. That's not even enough, he noted, to meet the county's payroll for a month.

The county board and nursing home management finally have begun an aggressive cost-cutting program and a management review, all aimed at improving the bottom line as quickly as possible. A special nursing home board of directors has been appointed and began meeting last week. A consultant is due to make a preliminary report on May 22. And the jobs of 27 full-time employees will either be eliminated or restructured on June 7.

Why all this sudden action when the nursing home has been losing money for years? Part of the problem is the state's recent decision to dramatically cut its Medicaid reimbursement rate to the nursing home. But the losses go much deeper, much longer than that.

County board members, Democrat and Republican, still seem to have little appetite for selling the nursing home, which would not only be difficult emotionally and politically but legally as well. It not only would require a two-thirds vote of county board members but also approval by a majority of Champaign County voters and by the Illinois Health Facilities Planning Board. It also would take time, meaning more money lost.

So the board seems to be headed, painfully and warily, toward asking the voters to give an even greater property tax subsidy to the nursing home. A tax increase proposal could be on the ballot this November.

That wouldn't be a quick help, though. Even if successful – and that may be a long shot, given the nursing home's recent financial history – the facility wouldn't receive the additional money until June 2009.

The best thing county leaders can do now is cut all unnecessary costs and do everything possible to enhance revenue at the nursing home – and then make that their permanent mantra.

That will not just improve chances for passing a property tax increase this fall, it's what they've owed taxpayers all along – but haven't provided.

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