BATAVIA – Despite additional federal financing, the Genesee County Nursing Home is expected to lose $3.5 million next year, according to County Manager Jay A. Gsell.

An inter-governmental program will provide $4.3 million in each of the next two years with a catch: the funding requires a 50 percent match from the county.

The nursing home has been a drain on county finances for several years. A two-year extension of federal funds will be the end of the program, forcing the county to increase its subsidies to the 240-bed facility in 2016.

The $8.6 million in government money will be used to offset at least part of a $5 million loan, according to Gsell. The money will not help losses that are due to a large percentage of Medicaid patients where reimbursement is about $100 a day per patient less than the cost of care.

The county may not be involved in the home after 2016. A study is now being completed on the facility’s future, which could include sale or lease. Legislators have assured patients, families and staff that care will be continued by the county or some other entity.

Gsell said the federal funds will require some changes in a $149.1 million budget for next year, completed last week.

The proposed spending plan – the subject of a public hearing next month – increases property taxes by about 2 percent, or $3 to $5 for most homes.

Gsell’s budget is the first to push the rate to more than $10 per $1,000 of assessed valuation. The proposed rate is $10.11, an increase of 22 cents. At the Legislature’s request, the rate has been held in the upper $9 range for several years with only modest increases.

The nursing home’s projected loss will get some relief from an expected increase of $2 million in sales taxes and $2.5 million from this year’s fund balance.