The legislation was introduced by state Rep. Susan Johnson (D-Windham), who reasoned that nonprofit hospitals that pay executives more than $500,000 annually can afford to contribute to their communities by paying property taxes.
The proposed bill is consistent with the viewpoint expressed by Connecticut Gov. Dannel P. Malloy (D), who argues nonprofits that provide their executives with exorbitant pay do not function as nonprofits, according to the report. Hospitals have argued that the state consistently underpays them on Medicaid reimbursement and overtaxes them.
“We’ve been fighting for the hospitals at the Capitol to make sure they are adequately funded, but I kept hearing about administrators’ salaries and how they’re making a few million dollars a year,” Rep. Johnson said, according to the report. “Having a cap here will help us provide more money to town services and educational services, particularly in these areas where the hospitals are.”
The Connecticut Hospital Association opposes the proposed legislation, arguing it would impede hospitals’ ability to attract executive talent, according to the report.
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