Republicans criticize rescissions [Journal Inquirer]

September 23, 2015

By Mike Savino
Journal Inquirer
Wednesday, September 23, 2015

HARTFORD — Republicans called Tuesday for a special session to allow lawmakers to make major changes to the budget after Gov. Dannel P. Malloy cut spending $103 million three months into the fiscal year.

Republican lawmakers were especially critical of Malloy’s decision Friday to reduce Medicaid reimbursements by $63.4 million, which hospital executives said becomes a $190 million loss because of the impact on federal reimbursements.

“That doesn’t seem like a good fiscal decision to me,” House Minority Leader Themis Klarides, R-Derby, said during a press conference at the Legislative Office Building.

Malloy has the authority to cut up to 5 percent from any budgetary line item and as much as 3 percent from any fund, but broader changes require legislative approval.

Hospital executives who were present at the press conference warned that the cuts, coupled with increases in the state’s hospital tax, would result in more layoffs and reduced services.

Patrick Charmel, president of Griffin Health Services Corp., parent company of Griffin Hospital in Derby, said the budget changes come as hospitals are trying to invest in initiatives that would decrease patient costs.

He estimated that employee compensation makes up roughly 60 percent of Griffin Hospital’s operating costs, making staff cuts a likely remedy for the reduction in reimbursements.

Western Connecticut Health Network President and CEO John Murphy added that the cuts likely will target preventive care programs, which have proved to be “financially challenging.”

Murphy said this would adversely affect lower-income patients who may not be able to afford medicine prescribed to prevent more serious medical conditions, increasing the risk that they will need costly procedures in the long term.

“We kid ourselves if we really think we’re saving money,” he said, explaining that the budget cuts take “it out on the poor who need it most.”

Executives from Eastern Connecticut Health Network, which operates hospitals in Manchester and Vernon, and Johnson Memorial Hospital in Stafford weren’t present, but Republican lawmakers said those entities also will be adversely affected.

“These cuts are so unfortunate because they will hurt the most vulnerable in our communities,” Sen. John A. Kissel, R-Enfield, said.

Sen. Tony Guglielmo, R-Stafford, said Malloy’s rescissions are just the latest in a series of cuts and tax increases targeting hospitals.

“During the last four years they have been promised help, only to have the rug pulled out from underneath them — not once, not twice, but four times,” he said.

Charmel said hospitals are paying $500 million in state taxes.

Republicans agreed the cuts are bad for hospitals, patients, and the state’s economy overall, but also said a special session is needed to revamp a biennial budget that has been subject to cuts just three months into its first fiscal year.

Malloy made the cuts amid concerns about reduced revenue due to recent stock market volatility, despite the Office of Policy and Management and Comptroller Kevin Lembo saying in recent weeks that the budget remained on course with a projected $800,000 surplus.

“This isn’t about ‘we don’t like these cuts, these cuts are better,’ — that isn’t what this is about,” Klarides said. “This about the process of budgeting in the state of Connecticut, and how doing it in a patchwork way, almost month-to-month, based on a deficit that continues to come is not an effective or an efficient way of doing it.”

Klarides and Senate Minority Leader Leonard Fasano, R-North Haven, said they want to be included in the budget-making this time, continuing their criticism that Malloy and Democratic legislative leaders negotiated the spending plan behind closed doors and without them.

Neither Republican, though, was willing to discuss ways to change the budget, including whether officials should make cuts in other areas of the budget or consider temporary tax increases.

“We need to sit in a room — we’re not going to negotiate this by saying this, that, and the other,” Fasano said. “Let’s get into a room and have a holistic discussion.”

He also criticized lawmakers for making decisions “in a silo, and then we throw bullets at each other.”

The only recommendation Fasano and Klarides publicly embraced Tuesday was the idea that Malloy’s administration seek savings when the majority of contracts with state employee unions come up for negotiation next year.

A spokesman for Malloy, though, said the governor doesn’t plan to call for a special session, and criticized hospital executives for threatening cuts without offering to reduce their own salaries.

“It’s pretty clear that what we saw at this press conference (was) House and Senate Republicans standing with CEOs, asking taxpayers to subsidize multimillion-dollar salaries,” the spokesman, Devon Puglia, said.

He also said hospitals made hundreds of millions of dollars in profits last year, a contention others in Malloy’s administration have repeatedly stated.

“Put simply, while we’re taking smart steps to ensure budget balance and plan for the long term, some obviously want taxpayer dollars to fund massive CEO salaries without doing anything to make care delivery more efficient and cost-effective,” he said.

Malloy’s budget office also said Tuesday the state still is providing $1.86 billion to hospitals.

Connecticut Hospital Association President and CEO Jennifer Jackson objected to the idea that executive compensation should be part of the conversation, saying lawmakers instead should focus on how to help reduce patient costs.

She also criticized Democrats for giving tax breaks “to corporations whose executives make multiples of what hospital CEOs make.”

Top Democratic lawmakers seemed to share Republicans’ concerns about cuts to hospital care, but criticized Republican legislators for raising concerns Tuesday despite opposing changes during a June special session that restored hospital funding to the budget.

“Now, after voting against those restorations in the budget, Republicans can’t decide among themselves whether they support the budget they voted against, or whether, like their House Appropriations Committee leader, they support the governor’s cuts,” House Speaker J. Brendan Sharkey, D-Hamden, said in a statement.

Sharkey referenced comments that Rep. Melissa Ziobron, R-East Haddam, made in a Facebook post in which she called Malloy’s cuts “a prudent thing.”

Senate President Pro Tem Martin M. Looney, D-New Haven, said he was “deeply disappointed” by the rescissions and pledged that lawmakers will continue to look for ways to help hospitals.

He also echoed criticisms from Sharkey — saying Democrats restored funding “in the face of Republican opposition” — and Puglia.

“As we engage in this process, I would agree extraordinarily well-compensated hospital CEOs and other top executives (need) to look for cost-saving measures that do not affect critical patient services or levels of employment,” he said.