Hospital tax cut replaced with tax hike in Connecticut budget plan

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Connecticut Gov. Ned Lamont has proposed a fiscal year 2020-2021 budget that cancels a previously approved tax cut for hospitals and replaces it with an annual effective tax hike of about $43 million, according to The Connecticut Mirror.

"We are developing a budget that will put the state's finances on a stable trajectory over the biennium and into the future," Chris McClure, spokesperson for the governor's budget office, told the publication regarding the hospital tax. "Disruption of recurring revenue sources, such as the current hospital tax arrangement, creates additional challenges to meeting this goal."

Hospitals were supposed to see their $900 million in annual state provider tax payments reduced to $384 million next fiscal year.

But the governor's proposed budget would keep the tax at $900 million per year, and the industry would receive $453 million in supplemental payments back from Connecticut as part of an arrangement designed to increase the state's federal Medicaid funding, the Mirror reported. That's $43 million less than the $496 million the industry now receives in supplemental payments.

The Connecticut Hospital Association came out against the governor's plan on Feb. 20.

"We are strongly opposed to the proposed budget. The current administration is not honoring the bipartisan agreement for this year or next year, and the budget makes additional cuts to hospitals," Jennifer Jackson, the association's CEO, said in a prepared statement. "We continue to be willing partners to find a sustainable solution, but this is not it."

The governor's plan comes as Connecticut faces a potential $3.7 billion deficit over the new two-year budget cycle.

Read more about the budget proposal here.

 

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