Connecticut hospitals are working to improve care for patients while remaining strong, stable organizations that will care for the next generations of Connecticut families.
Proposed Budget/New Property Tax
This proposed budget would remove the real property exemption for not-for-profit hospitals and allow municipalities to tax them, among other actions.
Legislators must reject the new tax on hospitals being proposed by the Administration. We’ve been down this road before, with a budget scheme 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.
The property tax proposal flies in the face of Connecticut history. The property tax exemption was established almost 200 years ago to provide necessary and important financial support to not-for-profit institutions such as hospitals that provide a clear and critical public good by preserving, protecting, and enhancing the health and general welfare of a state’s residents.
Our hospitals and non-for-profit institutions are the bedrock of our society and have strong and unique partnerships with their local communities. Any attempts to undermine or harm these institutions must be strongly rejected. Additionally, legislators must preserve the small hospital pool and keep Medicaid supplemental payments as a separate line item in the state budget. Last year the legislature enacted this protection to prevent the Governor from using his rescission authority to wipe out the entire account.
Prior to 2012, Connecticut did not tax not-for-profit hospitals. By 2016, the hospital tax had ballooned to $556 million a year, becoming the fourth largest state tax after the income tax, sales tax, and corporate tax. Hospitals now have a state tax burden that exceeds by nearly thirty times the corporate tax rate.
This is tax on the sick, hospitals, and healthcare, and it leads to higher costs, less access to care, and longer wait times. Because of the hospital tax and Medicaid underfunding, patients with private health insurance end up paying more than $650 more for the care they receive every year.
As a result of the hospital tax, more than 3,000 hospital jobs have been lost since 2013, programs and services have been curtailed, and some hospitals have been forced to delay or cancel capital improvements. The tax also drains hospitals’ ability to contribute to the economy at a time of deepening budget problems for Connecticut.
The state must stop taxing hospitals for the care hospitals provide to patients. Connecticut hospitals – and their patients – cannot continue to endure these taxes.