GOSHEN – Orange County, like all other counties in the state, faces significant financial challenges with increased state and federal mandates. They are no longer sustainable, County Executive Edward Diana said Monday as he announced his proposed 2012 county budget of $711 million that includes defunding the county nursing home as of July 1 of next year. That will save the county about $11 million just for the second half of the year and lay off 425 employees.

“The last thing I want to do is cut jobs,” he told a room full of county legislators and department heads. But, he said he had no choice but make the decision that would impact the county workers. Optimally, rather than shut down the Valley View facility, which current houses 325 people, he would hope the county will be able to find a buyer, be it a company or not-for-profit agency.

County Legislature Chairman Michael Pillmeier said while the decision is a difficult one to swallow, the county has no choice. He noted that eight years ago, Diana told lawmakers the nursing home should be sold because the county not continue to operate it year after a year at a loss. The county is subsidizing it now at a cost of about $20 million a year.

Pillmeier has already been in contact with a company that specializes in finding buyers for facilities such as this and he said would contact it immediately.

Diana’s budget, which is 1.75 percent higher than this year’s, also includes 90 other reductions in positions, but only one is filled. The others are vacant and would be defunded.