Fact Check for Gov. Malloy

October 8, 2015

Fasano refutes governor’s recent falsehoods about CT hospitals, economy, & business environment

Hartford – Senate Minority Leader Len Fasano (R-North Haven) is calling out Governor Dannel P. Malloy for incorrect and illogical statements he has made over the past few weeks regarding hospitals, the economy and the reason for his devastating budget cuts.

Fact Check on Hospitals

FICTION: Governor Malloy has defended his drastic cuts to Medicaid by distracting the public by claiming CT hospitals are well off with profits of over $916 million in 2014 and accusing them of complaining about losing a ‘subsidy.’

FACT: “The number the governor cites for hospital profits is purposefully meant to confuse the public. Hospitals are not making a profit of $916 million. The governor knows that, yet he continues to use misleading numbers to distract people from the fact that Connecticut’s entire health care system is in danger.

“In reality, pretax hospital profits last year amounted to $591 million. This year, when hospitals are taxed a whopping $556 million, their entire profit will be reduced to $35 million, which will quickly be eaten up by infrastructure and technology improvements that are mandated by the Affordable Care Act. Our nonprofit hospitals, which provide critical healthcare to patients with Medicaid, will now be taxed at an effective tax rate of 94%! This excessive taxation inflicted by Democrats will directly reduce services to the poor and elderly. Singlehandedly the governor is going to destroy the state’s entire health care system. Needed technology upgrades will go out the window. Patients with Medicaid will struggle to find care. This impacts people across the board everywhere in our state.

“Further, the governor keeps referring to ‘subsidies’ hospitals receive for Medicaid. These are not subsidies or grants hospitals receive to help maintain their business. Rather these funds help pay for services that hospitals provide to the Medicaid population. For every Medicaid covered patient cared for, a hospital on average receives 60% of payment for care, thereby taking a loss. So when the state reduces payments further, hospitals’ ability to provide care to Medicaid patients will be directly impacted,” said Fasano.

“Gov. Malloy is wrong about hospital profits. He’s wrong about the numbers and he’s wrong to focus on them as a means to distract the public. Hospital profits are not the issue here. The issue is Governor Malloy is plugging holes in the state budget by targeting the poor, the sick and the elderly. His actions are not going to hurt hospital profits, they are going to hurt people – specifically people on Medicaid. The Democrats’ cuts will directly result in people not getting the care they need,” said Fasano.

Fact Check on the Economy

FICTION: Governor Malloy blamed the volatile stock market as the reason why he had to make sudden cuts to the state budget targeting hospitals, mental health care, and services for the most vulnerable.

FACT: “Based on an updated Personal Income Tax revenue estimate from the nonpartisan Office of Fiscal Analysis (available here: https://www.cga.ct.gov/2015/ofarpt/2015OFA-1122.htm), Governor Malloy’s blaming of recent budget cuts on the instability of Wall Street is currently unfounded.

“According to OFA, analysts are not forecasting a need to revise downward their personal income tax collections in relation to stock market activity because they have not yet seen any collections to date that would warrant such a downward revision.

“However, OFA projections are showing a $92.6 million reduction in the personal income tax based on reduced collections of the withholding component of the personal income tax. This is not an element that is influenced or reliant upon Wall Street, but it is reflective of a budget enacted with many known holes and more people working in lower paying jobs as Connecticut continues to lose jobs in higher paying sectors.

“This means the governor’s entire argument that the stock market is to blame for his devastating cuts to the neediest is not supported by the data. With less higher paying jobs and more lower wage jobs, income receipts are down; this is not about Wall Street. Connecticut’s deficit is a direct result of poor planning and an irresponsible budget created by single party rule. The problems we see today will only continue until we completely rethink this failed budget, as an immediate special session would allow. To suggest otherwise and to lay blame elsewhere is delusional and fails to move us closer to resolving the serious problems at hand,” said Fasano.

Fact Check on CT’s Business Environment

FICTION: Earlier this week on WNPR’s ‘Where We Live’ Gov. Malloy was asked for an update on the state’s efforts to keep GE’s headquarters in Connecticut. He responded by blaming the company’s move on their CEO wanting to live and work in another state.

FACT: “That argument is a ridiculous excuse from a governor who sounds like he’s given up on finding a way to help companies like GE stay in our state. GE’s decision to move is not a question of CEO preference, but of commitment to doing what’s best for their business. Connecticut does not currently have the predictability or stability that supports a healthy business environment. Remember, GE is not the only company who is talking about moving. Torrington business owner Gerry Zordan said recently that he is moving his factory — a century-long institution in Torrington — to South Carolina. When asked why, Gerry said Connecticut’s taxes are ‘getting outrageous.’ He also clarified that he’s not leaving because he wants to be in a different community, ‘I am not leaving Torrington; I am leaving Connecticut,’ he said.

“The truth is Connecticut is facing a financial disaster because of budget after budget that fails to manage funds responsibly or think beyond two-years. We cannot blame Wall Street, just like we cannot blame business owners, for the serious and pervasive problems in our state. We also cannot respond to these problems by cutting from the most vulnerable, yet that’s exactly what this governor is doing.”