SCHENECTADY COUNTY — Schenectady County’s proposed new nursing home will cost taxpayers millions above the amount estimated earlier to subsidize each year, because the state has eliminated a key revenue source, officials said.

Under the original concept, the county expected to spend $5.2 million annually to support operations of a new 200-bed facility. The goal is to open the $51 million facility in 2010, though state approval and site selection is only pending.

The new facility is to replace the aging 360-bed Glendale Home, which is costing the county more than $7 million to operate this year and is expected to cost $10 million in 2009. The subsidy figure reflects all county costs after federal and state reimbursements.

However, the state Legislature eliminated a $100 million fund, called the Public Facilities Grant, for public nursing homes for 2009 during a special session in August. The county had hoped to tap this fund to offset costs.

According to county officials, the cost to operate the new facility will now top $8.5 million annually, even after the county receives enhanced reimbursement for a new facility.

The cost would have been even higher had it not been for $6 million the county is receiving from the federal government, a one-shot reimbursement to all counties that operate nursing homes, retroactive to 2006. Schenectady will receive approximately $750,000 annually, beginning in 2009, but the total will decrease dramatically in subsequent years.

Without the federal grant, the cumulative subsidy to Glendale would have topped $13 million between 2009 and 2012, officials said.

County Legislator Gary Hughes, D-Schenectady, said the county is aware that elimination of the Public Facilities Grant will increase the cost of operating the proposed home, “but the public wants a nursing home.”

Hughes said, “We never expected to break even.”

Legislator Martin Finn, D-Niskayuna, said, “People in Schenectady County want a nursing home, even though the costs will increase.”

Finn, who is seeking re-election this year, plans to ask residents of District 3, comprising Niskayuna and Glenville, if they want to continue supporting nonmandated programs, like the nursing home, as he campaigns.

Tim Macfarlane, a Republican challenging Finn for the District 3 seat, said he thinks the county should work with other agencies to operate Glendale and thereby reduce its costs.

“No politician is saying we should come out and do away with the nursing home. I’m saying we should work in cooperation with other facilities,” Macfarlane said.

He also does not think the county should build a new nursing home.

“I’m not sure they can afford it,” he said.

County Legislator Dr. Brian Gordon, an orthopedic surgeon, said Ellis Hospital already has enough on its plate without dealing with Glendale. Ellis is consolidating operations with the former St. Clare’s Hospital.

“Glendale is even more important now with a single hospital entity with limited bed space,” he said. “We are seeing issues in the summer. In the winter having bed space becomes more critical and things could be potentially worse.”

Ellis discharges patients to Glendale, freeing up hospital beds for sicker patients, he said.

Minority Leader Robert Farley, R-Glenville, repeated his proposal that the county divest itself of the nursing home by turning it into a nonprofit corporation. The county would still be responsible for personnel liabilities but others costs would come off the county’s books.

BERGER COMMISSION

The Berger Commission, more formally known as the Commission on Health Care Facilities in the 21st Century, recommended the county downsize the 360-bed Glendale skilled nursing facility to 168 beds. The Berger Commission findings became law in January 2007, also mandating consolidation of the services of Ellis Hospital with those of Bellevue Woman’s Hospital and St. Clare’s Hospital. Those changes are under way.

The Berger report suggested the county keep Glendale open, but county officials said the facility is inefficient and too expensive to operate. They submitted a certificate of need with the state in May for permission to build the new facility.

The county has already begun to reduce the number of beds at Glendale in anticipation of a new facility. Glendale went to 220 beds Dec. 31, and will go to 210 beds by Dec. 31, 2009, and to 200 beds by Dec. 31, 2010. To achieve the reduction, the county has limited admissions.

Glendale’s $7 million county subsidy is part of structural deficit in the county budget. Another is annual reliance on the county’s surplus fund to balance the budget, this year amounting to $8 million. The 2008 county budget is $283 million.

On top of these expenditures are increases in personnel costs and in state-mandated programs like Medicaid.

Meanwhile, county sales and mortgage tax receipts — two main revenue streams — are coming in at or near projections. The county budgeted these figures conservatively.

“The main bogie man is state revenues,” Hughes said.

Philip Fields, D-Schenectady, chairman of the county Legislature’s Ways and Means Committee, said the county has only three ways to close the deficit: cut programs and services, use the surplus and raise taxes. He said officials are reviewing all county programs and services. The tax option is on the table for discussion, Hughes said.

“People need to understand that when the state reduces its budget and it doesn’t eliminate the obligation to maintain services, it is sending the costs downhill to counties,” Hughes said. “We have no way to pay those costs other than raise taxes. Even after we are done cutting programs, it is likely we will raise taxes.”

Finn said closing the gap should involve spending cuts, a tax increase, asking the state to restore aid cuts and running state-mandated programs more efficiently.

Added, Finn, “The people of Schenectady aren’t stupid. If they know we are required to have these services and we have to fund them, it is through increased taxes.”

County Legislator Vincent DiCerbo, D-Schenectady, said he has hope the state Legislature will restore some of the cuts to counties. “We have taken the brunt of the cuts while others are getting off unharmed or with little cuts in their operations. There has to be some equality here in terms of shared sacrifice,” he said.

Said Fields, “We definitely are going to make some fundamental changes in the way government spends due to the fact these costs are going up and there are no additional revenues coming in.”