The time to pay the piper for Woodland Place has come.

In a proposed 2009 budget, the Mercer County Commissioners tacked on a 2-mill property tax hike to get the floundering Coolspring Township nursing home in the black.

That increase spells out to about $35 on the median county homeowner’s annual property tax bill. It brings in a little under $2 million a year to county coffers.

After the former county nursing home was privatized, a prior board of commissioners in 2002 backed an $8.8 million bond to fix the deteriorating building up.

But Woodland Place began to drown under the debt load and turned to the county to cover the bond payments.

In the last four years the home has made one partial payment, in 2006, to the tune of about $200,000, said county fiscal administrator John Logan. The county has spent over $2 million to keep up on the bond.

Of the $580,000 a year the county is on the hook for, most is interest, Logan said. Commissioners project that if the bond were paid across its life, it would actually cost about $17 million.

So far, the county has paid the debt load from a $3.5 million escrow fund set up at the time of the nursing home’s sale. There is $1.4 million left in that fund, and combined with some money held aside by the bank, the county would needs to get together about $6.2 million to cover the remaining balance.

Under the bond’s present terms, it cannot be paid off early until 2013, Logan said. In order for the Woodland Place board to do anything that affects the bond – like selling the home or going into bankruptcy – the county has to be ready to pay the bond off in full, he said.

While the nursing home is run by a nonprofit board, there is a seat for one county commissioner, and as backers of the loan they have the authority to take control of the home.

Commissioners haven’t said yet what they plan on doing with the nursing home, but Commissioner Kenneth Ammann said he’s hopeful about a sale and Commissioner John Lechner said they don’t want to release specifics yet. Whatever they plan, he said the nursing home is expected to stay open.

Commissioner Brian Beader and Lechner both voted for the budget. Ammann opposed it, and said instead of raising taxes this year the county should rely on its $5 million surplus to get the home through. He opposed a tax hike because of the troubled economy.

He said a tax increase would likely be necessary next year, but that in a better economy it might be more palatable.

Lechner said the surplus is a necessary cushion to keep the county from running into red ink. The 2009 budget projects a deficit that will already drain almost $2 million of the $5 million surplus. Based on Logan’s projections, property tax revenues are expected to be down, along with state pass-through money.

The county also plans to beat back expenses by agreeing to a hiring freeze, which will mean as people leave county departments this year some will not be rehiring new staff.