Wednesday, August 12, 2009

Government Accounting - Fulton and Peoria Counties

"Fulton County won't sell nursing home" reads an article by Kevin Sampler in today's JS. "The home has a net annual cost of about $750,000, according to the counties private auditor". Board Chairman, Ed Ketcham, thought it was losing over a million dollars. Ed, you are right but there is accounting for tax supported public bodies that differs from non-tax supported private bodies. The article said it took 30 minutes to explain it to you because, you like most board members confuse the two accounting systems.

Actually, the JS reporter tried to embarrass you in his article today because he doesn't understand the difference either. He said it took the auditor 30 minutes to explain why the loss was not over a million dollars, but $750,000 minus $334,000 and minus $400,00, why Ed, the nursing home almost made a profit! (Allen Mayer, Peoria County Board Democrat, said the same thing while Bel-wood collected almost $3,000,000.00 in property taxes in 2008, showing a substantial actual loss by ANY private business standard. Carol Trumpe, Republican Board member said the same basic thing).

Here is a simple answer as to why the loss was not just $750,000 but a loss of $334,000 in property taxes coming from county taxpayers which could be returned to their pockets plus $400,000 transferred from the counties General Fund (property taxpayers dollars that could be returned to taxpayer's pockets) to support all indirect costs such as retirement, social security, etc., just like Bel-Wood in Peoria County, all out of the property taxpayers pockets.

So the actual loss by the Clayberg Nursing Home was $750,000 plus $334,000 plus $400,000 or well over a million dollars.

So how does public accounting differ from the private sector accounting? The private nursing home sector does not collect the indirect costs from the taxpayers, $400,000 and growing every year, nor does the private sector get to collect the $334,000 in direct property taxes. Even with $734,000 subsidized by the property tax payers in Fulton County, the Clayberg Nursing Home still lost $750,000.00

Pretty simple but government elected officials and public workers, as well as the auditors who audit government bodies, know where their bread is buttered.

Anything else? Yes the private sector pays property taxes; they do not collect them. So Fulton County loses these taxes adding to the $750,000 actual loss, the $334,000 and the $400,000 SUBSIDIZED TAXES all because the majority of board members believe they need to provide a "safety net" for the poor. Tazewell County does not have a county run nursing home (they got out the business long ago) yet only 10 or so, Tazewell residents make up the 260 Bel-Wood Nursing home population.

I'll make it simpler yet. Sell the home than you won't have a $750,000 operating cost, give the #334,000 back to the taxpayers or at least don't take this money from them and ditto all the indirect taxes now $400,000 and counting.

And you still have a nursing home paying taxes.

I know some auditors and financial officers read my blogs. I dare them to refute what I just blogged.

Good grief! And neither do I have an accounting degree. Just a modicum of common sense. Nor do I have a Journalism degree.

1 comment:

Karrie E. Alms said...

Never miss an opportunity to tax us to compete against the private sector. I don't have an accounting nor a journalism degree. I just have common sense about needs vs. wants. Basic services vs. icing and sprinkles. My want list is simple --- less taxes for less government. Please have the funds to fix the alleys without having to wait fifteen years and do not take more money from my pocket by proposing to tax the water after ILAWC is attempting to raise my bill about 30%.

Not rocket science! Just common sense! :)