CT hospitals launch TV ad to protest new tax proposal

Connecticut’s hospital industry launched a new television ad Thursday to protest Gov. Dannel P. Malloy’s proposal to end nonprofit hospitals’ exemption from local property taxation.

The Connecticut Hospital Association announced the commercial will air starting today on network and cable television stations, and also can be seen at http://nomorehospitaltax.org

The commercial opens by listing a variety of occupations and one common thread among the people in all of them: they all pay a price when taxes rise on Connecticut hospitals.

“We pay the price when the state taxes hospitals,” the ad continues. “Services get cut. Wait times get longer.”

“The proposed budget, with a scheme to let municipalities tax hospitals, has once again put hospitals and their services at risk,” said Jennifer Jackson, chief executive officer of the hospital association. “After more than $2 billion taxed and cut from hospitals in the past five years, we have no choice but to once again fight back against these dangerous and unprecedented attacks on patients, hospitals, and our healthcare system. We look forward to again working with legislators to protect and defend the critical healthcare services on which the people of Connecticut deserve and rely.”

Chris McClure, spokesman for the governor’s budget office, said the industry would gain resources under the administration plan.

Municipal taxes on hospitals’ real property, based at current mill rates, would amount to about $212 million per year, the administration says. The governor also proposed eliminating $11.8 million in annual funding for small hospitals.

In return, the state would increase its payments to hospitals by $250 million per year. But because those payments would be eligible for federal Medicaid reimbursement, the net cost to the state would be less than $88 million per year.

“Let’s be clear: in a budget that includes $1.3 billion in spending cuts, the Governor’s plan would increase total funding to the hospital industry by $28 million,” McClure said. “For one of the few sectors that does well in the budget to cry foul and distort the facts is unfortunate, especially when the proposal would also inject more dollars into local municipalities. For an industry that repeatedly claims to be in dire financial circumstances, it’s remarkable that they can find millions of dollars every year for paid advertising.”

But hospital officials say they’ve already seen how growing pressures on state finances negated promises to assist hospitals in recent years.

In 2011, a new provider tax was imposed on hospitals only as a legal maneuver to qualify Connecticut for federal assistance through Medicaid. The state collected $350 million in taxes on the industry, but returned $400 million in supplemental payments.

Over the past six years, though, the tax has grown and the supplemental payments have shrunk — despite an increase in the federal reimbursement rate. Hospitals will pay $556 million in total this fiscal year and receive $117 million back as Connecticut misses out on hundreds of millions of dollars in potential federal reimbursement.