CLAREMONT — The county delegation of state representatives will hold a public hearing Tuesday on the Sullivan County Commissioners’ proposed $39 million budget for the fiscal year beginning July 1.

The hearing will be held in the Goodrich room of the Sugar River Valley Technical Center beginning at 4 p.m.

The budget represents a 2.34%, or nearly $900,000, increase from the current budget of $38.15 million. According to the budget documents, the amount to be raised by taxes in the 15 county municipalities is projected to increase a little more than 16%, or almost $2.5 million. The actual increase in the county tax rate for each municipality will vary depending on property assessments. The Department of Revenue Administration sets the tax rates in the fall.

Sullivan County Manager Derek Ferland said a 4.5% cost-of-living increase for county employees, totaling $800,000, and bond payments on the Sullivan County nursing home project, totaling $750,000, are two of the big drivers of the increase.

On the revenue side, a reduction in the use of fund balances of $1.7 million and $120,000 less in revenue from the Register of Deeds because of a cooling real estate market are two of the reasons for the increase in taxes. But with higher interest rates, the county projects an increase of nearly 67%, or $120,000, on interest income to $330,000. The debt service line item is up $743,000. Other increases include capital reserves, $302,000 or 127%, and Department of Corrections capital, $80,000 or 133%.

The budget proposes using $2.6 million for revenue from fund balances, but only a portion of that will offset the tax increase. Some of the money from a capital reserve balance will go toward capital purchases.

Another factor driving the budget increase is agency costs for short-term contracted nursing staff.

“We have to use agencies because we don’t have enough full-time or per diem staff to cover our staffing requirements,” Ferland said. “We’ve always used some amount of agency in the past, but since COVID our reliance on agency has grown.”

The companies that provide staffing have increased what they charge the county by as much as 50%, Ferland said.

For the new fiscal year, the county is projecting expenses to exceed revenues at the nursing home by $1.5 million as a result of a population reduction because of rooms taken offline for the construction project and the higher agency costs. That is an increase of $900,000 from the current year.

Ferland said county officials are working to address the increasing costs and staffing issues in the most cost-effective way possible while still meeting the nursing home mission of providing long-term care.

“I feel it is a responsible budget, if not necessarily great news, as no one likes to see their taxes go up,” Ferland said. “But we are dealing with a $75 million (nursing home) project that just started and health care staffing. When the cost of everything required for our mission goes up and up a lot, we have limited things we can do to not pass that cost on to taxpayers. We try to be cognizant of what is going on to keep our costs down.”

Patrick O’Grady can be reached at pogclmt@gmail.com.