Conn. hospitals to lose millions in tax reimbursements under state budget cuts

Many local hospitals in Connecticut will see their tax refunds shrink by upwards of $1 million each as a result of state budget cuts decided upon last week, according to The Hour.

The reduced funding is part of the state's response to lower-than-anticipated tax revenue. Gov. Dannel P. Malloy (D) last week cut refunds distributed to hospitals for federal and state taxes paid to help close a nearly $1 billion deficit, according to the report.

Statewide, hospitals will receive $134 million less in tax reimbursements in fiscal year 2017 than originally budgeted more than a year ago when the 2016-17 budget was initially approved, according to the report.

Norwalk (Conn.) Hospital will receive $3.7 million during the 2017 fiscal year in supplemental payments from the state, roughly $1.6 million less than it received in fiscal 2016, according to the state Office of Fiscal Analysis. In total, Norwalk Hospital will receive $4.7 million less than what was expected last year, according to the report.

"What this does is take an already bad situation and makes it worse," Steven Rosenberg, CFO for the Western Connecticut Health Network, which includes NorwalkHospital, told The Hour.

Mr. Rosenberg said Western Health Network hospitals are already posting an $8 million loss for the first half of the 2016 fiscal year, adding that the state budget cuts add a $3.2 million tax increase. The hospitals are searching for opportunities to save, and layoffs cannot be ruled out, said Mr. Rosenberg, according to the report.

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