Hospital tax in crosshairs

March 20, 2014

By: Bill Fallon | Fairfield County Business Journal

Greenwich Hospital President Frank Corvino joined four regional GOP state senators in Hartford recently to seek repeal of the so-called hospitals tax.

“The Hospital industry suffered from last year’s budget cut, which imposed a tax of $336 million on hospitals over the biennium,” Corvino said in testimony before the Finance, Revenue and Bonding Committee. “Last year, the combined decrease in funding for YNHHS (Yale New Haven Health System of which Greenwich Hospital is an affiliate) was nearly $40 million. This year, YNHHS affiliates will share a $52 million reduction. And, in 2015 we will pay over $75 million in taxes. We’ve done extraordinary things to minimize the impact to patient care. But it is very challenging.”

A delegation consisting of state Sens. L. Scott Frantz; Livvy Floren, Stephen Walko and Fred Camillo at the same public hearing announced their support for “Raised Bill No. 368, An Act Phasing Out the Hospitals Tax.”

“Altogether, in the last year, Connecticut hospitals have eliminated more than 1,400 jobs, reduced staff salaries and benefits, reduced some services and postponed investments in technology and infrastructure,” said Corvino. “This is having a negative effect on the state economy.”

“This tax places unnecessary burdens on our hospitals,” Frantz said. “By repealing the hospitals tax, we can alleviate these burdens and enable hospitals to reduce the costs of health care, improve access to services and retain jobs.”

The legislation would implement a gradual elimination of the tax beginning in fiscal year 2015 until fiscal year 2019 when the tax would be completely eliminated. In fiscal year 2015 the amount due from each hospital would be 80 percent of the hospitals tax paid during fiscal year 2012. In each subsequent year, the hospitals tax would continue to decrease by 20 percent until there is no tax to pay.

“This is a cautious, measured, and prudent way to eliminate a tax that has hurt the delivery of health care services in our state,” Camillo said.

The senators urged the public to follow the legislation on the General Assembly website.