HARTFORD, Conn. – In addition to trying to figure out how to deal with the changing landscape of how hospitals are managed and financed, the legislature’s Finance, Revenue, and Bonding Committee heard testimony Thursday on a bill that would phase out the hospital tax over the next four fiscal years.
Since 2000, hospitals were successful at fending off threats that the state would reinstitute a hospital tax, then came the $3.7 billion budget deficit that Gov. Dannel P. Malloy inherited when he took office in 2011 and all bets were off. Malloy was successful in getting lawmakers that year to approve his proposed budget, including a hospital user tax.
“When originally proposed, the hospital tax was levied to draw federal funds to help balance the state’s budget,” Frank Corvino, president and CEO of Greenwich Hospital, reminded the committee Thursday. “The taxes collected were returned to hospitals based on a formula that considered free and uncompensated care.”
But things have changed.
When the tax started it brought in an additional $200 million a year in federal revenue. That amount will be reduced to $40 million, Stephen Frayne, senior vice president of policy at the Connecticut Hospital Association, said.
Also, when the tax was imposed it was made with a number of promises, Frayne said.