Understanding The Full Picture Of A New Our Island Home

To the editor: As Nantucket voters head to Town Meeting, we will once again be asked to weigh in on a proposal to fund a new Our Island Home (OIH). This is an important decision, one that requires a two-thirds vote, and it deserves a clear, complete understanding of both the upfront cost and the long-term financial commitment.

At first glance, the proposal centers on building a new 45-bed skilled nursing facility, with an estimated total cost of $134.5 million. After accounting for prior funding, voters are being asked to approve a $119 million debt exclusion. But the initial price tag is only part of the story.

Project proponents would like you to focus only on the projected operating deficit. This is misleading. The total financial burden totaxpayers is significantly larger when the annual debt service on $119 million of new long-term debt is taken into account.

Together, these costs are projected to add roughly $15 million per year to the Town’s $170 million budget starting in the first year of operation and growing over time. This amount is nearly 10% of the Town’s total operating budget. It’s a sizable increase -- one that will ultimately be reflected in higher property taxes.

Over a 20-year period, the total taxpayer subsidy could exceed $350 million. On a per-bed basis, that translates to more than $375,000 per bed in the first year of operation, rising over time, and roughly $9 million per bed over two decades beyond what is covered by Medicare, Medicaid, and private pay reimbursements.

To put that in context, Nantucket already carries approximately $345 million in existing debt. Adding a project of this scale would represent a significant expansion of the Town’s long-term financial obligations, with implications that extend well beyond the initial construction period.

Of course, projections are just that, projections. As we’ve seen with other construction projects on the island, costs can rise due to change orders, scope adjustments, and market conditions. Operating expenses may also shift based on staffing, inflation, and occupancy levels.

For taxpayers, this raises broader questions. Higher property taxes don’t exist in a vacuum. They can influence rents, impact small businesses, and increase the overall cost of living on Nantucket. Year-round residents, seasonal homeowners, and renters alike are likely to feel these ripple effects.

Project proponents have been reluctant to make known that Federal regulations do not allowlimiting OIH admissions to only Nantucket residents. As a result, islanders would not beguaranteed a priority for beds, which must be awarded by application order. The reality is that Nantucket residents may be vying with off islanders for rooms as they become available.

All of this comes at a time when Nantucket is also facing other significant capital needs, from schools and infrastructure to coastal resilience, water quality, and affordable housing. In total, projected capital requests could approach $1 billion over the next decade, with more than $200 million in potential overrides already under consideration in the near term.

With so many competing priorities, it’s worth asking how this project fits into the Town’s long-term financial picture.

Voters may also want to consider a few additional questions:

• Were alternative or scaled-down approaches fully explored?

• Is there potential for private or philanthropic support?• How will this project affect the Town’s ability to fund other critical needs?

• What will be the pressure on voters as they consider approving future funding requests for critical priorities such as schools, infrastructure and coastal resilience project that will benefit the entire island population?

These are not easy questions and there are reasonable perspectives on all sides. But they are important ones.

At the end of the day, Town Meeting is where Nantucket’s voters act as its legislature. This decision, like all others before it, rests with the voters. Having a full understanding of both the benefits and the long-term financial implications will help ensure that whatever decision is made reflects the informed will of the community.

Joe Wright and Amy Eldridge
Know Before You Vote Coalition