BRISTOL - Bristol Hospital officials are vehemently opposed to a proposal that would allow municipalities to levy a property tax against nonprofit hospitals, with the promise that the costs would be offset with more state and federal funding.
“I don’t think it’s possible,” Kurt Barwis, president and CEO of Bristol Hospital, said of the hospital somehow being fully reimbursed.
According to Gov. Dannel Malloy’s proposal - which is part of a budget plan he recently introduced to combat a $1.7 billion deficit in the upcoming fiscal year - hospitals around the state would pay roughly $212 million in real estate taxes. In return, through a federal matching program, the state would pay the hospitals about $88 million and an additional $162 million would come from federal aid.
“We can certainly understand that a group at risk of potentially losing a tax exemption would be hesitant to embrace such a proposal, which is why we have also proposed the creation of $250.3 million in supplemental payments to help offset any new property tax liabilities - which could help generate $212 million in new revenue to municipalities, far more than the towns receive under the existing (Payment in Lieu of Taxes) program,” said Chris McClure, a spokesman on behalf of Malloy’s office. “In the aggregate, including the proposed change to the Small Hospital Pool, the hospitals around the state could experience a net gain of approximately $28 million.”
Barwis, though, said the federal matching program that would make this plan possible is in danger of being eliminated. And even with it, he doubts Bristol Hospital would come out on top.
“They know and we know this is short-lived,” the hospital president said.
His fear is that even if the federal funding was cut, he believes the tax would remain in place.
“Once you create a tax, it isn’t going away,” said Barwis.
Furthermore, Bristol Hospital just posted a $1.8 million loss in the last fiscal year, after taking a $2 million hit through the state’s existing hospital tax, according to Barwis.
If the Small Hospital Pool were to be eliminated, as it is written under the current proposal, this would cost the hospital an additional $2.3million, equating to about a $5 million hit to Bristol Hospital, he continued.
The hospital “wouldn’t have a dime for emergency expenses, let alone property taxes,” and could be “essentially be taxed out of business,” Barwis wrote in an email to city and state officials.
Mayor Ken Cockayne on Friday said he has been in contact with hospital officials in an attempt to learn more about Malloy’s proposal.
“At this point, I don’t know enough about the proposal to make an educated comment,” the mayor said.
Meanwhile, the Connecticut Hospital Association is also in opposition of further taxes on state hospitals.
“We strongly oppose this new tax on hospitals,” Jennifer Jackson, CHA’s CEO, said in a statement. “Taxing local hospitals is a direct attack on the fabric of our communities. We’ve been down this road before, with a budget gimmick that already resulted in more than $2 billion taxed and cut from hospitals. The hospital tax has increased costs for patients, caused the loss of thousands of healthcare jobs, extended wait times, and reduced access to care for those who need it most.”
Under Malloy’s proposal, Barwis added, “there’s going to be winners and losers, and I think Bristol Hospital is going to be a loser. The Bristol community is going to be a loser.”
Justin Muszynski can be reached at 860-973-1809 or at firstname.lastname@example.org.