Rep. Case proposes phasing out hospital tax

HARTFORD – With hospitals like local Charlotte Hungerford struggling to make ends meet in Connecticut’s unfriendly economic environment, State Rep. Jay Case (R-63) is pursuing legislation to phase out the burdensome hospital tax.

The state’s hospital tax, enacted during Gov. Dannel P. Malloy’s inaugural term and the single highest tax increase in state history, will cost hospitals $500 million over the next two years and lead to employee layoffs. Case’s incremental proposal will allow hospitals to keep the money – and services – while the state finds other ways to slim down its budget.

Case’s proposal, H.B. 5562, has long been a priority for service providers, hospital administrators and the business community.

“This tax was intended as a way to bring in extra revenue for important, necessary services,” Case said. “But it’s now a beast of its own and hospitals aren’t seeing the money come back to them. Facilities like Charlotte Hungerford are sick and tired of being lied to and having their already tight revenues stripped away. We need to consider the message we’re sending to health care providers.”

In a span of four years, the state’s hospitals have gone from gaining $50 million to losing about $248 million because the state has retained almost all of the tax revenue instead of returning it to health care services, as promised. As with any tax, it gets passed to the consumer, and in this case, it will result in higher medical costs for patients through increased insurance premiums.

“This tax does not protect the hospitals, but rather, it accomplishes the opposite: it balances the state budget on the backs of hospitals and consumers are the ones hung out to dry,” Case said.

Case’s proposal has been sent to the tax-writing Finance, Revenue and Bonding Committee. It hasn’t yet been given an appearance date.