Is Governor Dan Malloy’s hospital tax proposal just what the doctored ordered to aid fiscally troubled cities? Malloy’s two-year, $40 billion budget proposal calls for a new property tax on hospitals expected to raise more than $200 million statewide with about $20 million of that earmarked to Bridgeport from its two acute care facilities. It’s a work in progress with many unanswered questions that faces potentially fierce opposition from the Connecticut Hospital Association.
Basically Malloy is saying we’ll place hospitals on the local tax rolls, but hospitals will be made generally whole through increased medicaid reimbursements, some of which would come from the federal government.
Currently Bridgeport receives payments in lieu of taxes for tax-exempt properties but not nearly the amount if hospital institutions that serve regional patients were assessed and fully taxed on the city’s grand list of taxable properties. City bean counters are reviewing Malloy’s spending proposal to determine how it will impact the municipal budget Mayor Joe Ganim submits to the City Council the first week of April.
After a cranky first-year budget, Ganim wants to hold the line on taxes for the budget year starting July 1, or preferably reduce the city’s 54.37 mil rate to provide relief to taxpayers and build confidence with potential investors turned off by the financial result of last year’s property revaluation. Ganim’s initial read on Malloy’s budget is positive, but there are many tricky parts as the spending plan makes its way through the state legislature. Sometimes governors give you here, but take there. That’s the the key, are we gaining versus losing?
Jennifer Jackson, chief executive officer of the Connecticut Hospital Association, issued a rebuke of Malloy’s spending plan:
We strongly oppose this new tax on hospitals.
Taxing local hospitals is a direct attack on the fabric of our communities. We’ve been down this road before, with a budget gimmick that already resulted in more than $2 billion taxed and cut from hospitals. The hospital tax has increased costs for patients, caused the loss of thousands of healthcare jobs, extended wait times, and reduced access to care for those who need it most.
Our local hospitals are the cornerstones of our communities, providing tens of thousands of jobs and serving as a literal lifeline to the people we serve.
We will vigorously fight any new attempt to tax hospitals.
Fiscally troubled Hartford with three hospitals would benefit the most under Malloy’s proposal. Senate President Martin Looney, who represents New Haven and spearheaded uniformity in local car taxes that benefits higher-taxed city residents, will be a key figure in budget deliberations. Imagine Yale New Haven Hospital fully on the tax rolls? So city financial advocates view Malloy’s hospital proposal as a potential windfall.
Bridgeport State Rep. Steve Stafstrom whose Black Rock and Brooklawn constituency was largely hammered by the revaluation, supports the governor’s budget including the proposed revenue increases from hospitals.
These are challenging times and the Governor proposed some big changes, particularly regarding the relationship between the state and our cities and towns. I am very encouraged that the Governor has placed an emphasis on investing in our larger cities, including Bridgeport. He made a point to stress the inequities in our state’s regressive property tax structure and education coast sharing formula, which penalizes cities like Bridgeport and results in higher taxes, less spending on education, and reduced services.