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Withholding Of Hospital Funds Highlights CT Budget Woes

Connecticut Hospital Association

WSHU Senior Capitol Reporter Ebong Udoma recently sat down with Morning Edition Host Tom Kuser to shed some light on the budget battle between Connecticut Governor Malloy and the state’s hospitals.

Below is a transcript of their conversation.

TOM: An ad has been running quite frequently on local television in the past few months.

"Governor Malloy’s hospital tax is putting our health care at risk. Hospitals are taxed 30 times more than any other organization, costing families hundreds more and threatening their care. Governor Malloy you should be on the side of the hospitals and the patients."

From the ad it seems Connecticut hospitals are at war with the state’s Democratic Governor Dannel Malloy. Ebong, what’s going on between the hospitals and Malloy?

EBONG: Well, Tom, it seems this particular dispute has to do with the state’s current budget deficit. It’s projected to be about $220 million this fiscal year. Malloy has tried to reduce that deficit by suspending about $140 million in state and federal payments to hospitals. And that money is actually repayment for a portion of the more than half a billion dollars hospitals pay in state taxes a year.

TOM: That’s a bit confusing?

EBONG: Yes, Tom, it gets even more confusing because only a third of $140 million being withheld by the state is state money. The bulk of it is federal matching funds.

TOM: Okay. So how is Malloy justifying this move?

EBONG: Malloy seems to feel most Connecticut hospitals are financially strong enough to take the hit. Here’s what he’s said in the past.

“If you make almost $1 billion a year how bad are things. If you are having the best results in recent history in hospital performance why do you need the citizens of Connecticut to give you an additional $500 million.”

TOM: But aren’t some hospitals complaining that they are hurting financially, especially the smaller independent hospitals?

EBONG: Yes, they are. But here’s what Malloy says:

“If they are hurting so bad why are they paying their chief executives $3.5 million?”

TOM: So that’s why the hospitals have turned to an ad campaign to try to elicit public support?

EBONG: Yes. Jennifer Jackson is CEO of the Connecticut Hospital Association. She says not having the funds could lead to job cuts and reduction in services to local communities. Here’s what she said when I called her.

“In the past three years we have already lost 3,000 jobs because of cuts that came before this.”

TOM: I understand that’s gotten the attention of both Republican and Democratic lawmakers in Hartford.

EBONG: It has. Just this week, Republican leaders in the General Assembly offered a plan they say would close the budget shortfall and restore the $140 million payment to the hospitals.

TOM: Is that the plan that includes a two-day furlough for most state workers?

EBONG: It is. And as you said Tom, Democratic lawmakers are also sympathetic. They’re still working on their own deficit reduction plan. Here’s what State Senate President Martin Looney, who is from New Haven, the city with the state’s largest hospital, Yale New Haven, told me.

“There is concern about that because obviously some of those hospitals are major employers in their communities and engines of economic growth. So we are hoping if we can find ways to mitigate those cuts and look for savings in other areas.”

TOM: That probably means the Democrats are also looking at cutting some service?

EBONG:  Democratic lawmakers haven’t come up with anything yet, but Governor Malloy has just announced $65 million in cuts -- a huge chunk of those cuts are from the Department of Developmental Services’ budget.

TOM: Ebong, thanks very much getting us up to speed on the budget talks.

EBONG: Thank you, Tom.

As WSHU Public Radio’s award-winning senior political reporter, Ebong Udoma draws on his extensive tenure to delve deep into state politics during a major election year.
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