Because We Care
Governor Malloy Has Once Again Proposed Steep Tax Hikes and Deep Cuts to DKH: How You Can Help
Once again, Governor Malloy has included steep tax hikes and deep cuts to hospitals in his proposed 2018-19 state budget. These measures (outlined in detail below) would have a particularly significant effect on Day Kimball Healthcare, as an independent non-profit community hospital and health system. Our community must come together to make our voices heard in opposition to these measures, so that we can continue to maintain and expand upon the high quality health care that DKH is able to provide close to home for the residents of Northeast Connecticut.
HOW YOU CAN HELP
- If you are a resident of Putnam, please be aware that the Annual Town Meeting to vote on next year's budget will be held Wednesday, May 10 at 7:30 p.m. at Putnam Middle School, 35 Wicker Street. We are pleased and grateful that Putnam town administrators and members of the Board of Finance have removed an initially included new $546,000 property tax on our non-profit hospital from this proposed budget.
- Write a letter to the editor. The points included below may be used to help in writing a letter to the editor, as well as your thoughts on how these proposals would negatively affect you personally. Letters to the editor may be submitted to any of these local papers:
Norwich Bulletin: letters@norwichbulletin.com
Villager Newspapers: charlie@villagernewspapers.com
Courant Community: use this online form >
WHAT YOU NEED TO KNOW
Once again, Governor Malloy has included steep tax hikes and deep cuts to hospitals in his proposed 2018-19 state budget. Connecticut hospitals currently pay $556 million in taxes per year, a rate 30 times the state’s corporate tax rate. DKH currently pays $6.2 million in taxes per year. If the Governor’s proposed measures are passed, it could add nearly $4 million in additional tax liability to DKH, representing a year-over-year tax hike of approximately 65% for our non-profit community hospital and healthcare system. We cannot let this threaten Northeast Connecticut's access to high quality health care close to home, or our local economy.
Day Kimball Healthcare is region's major provider of health care and its largest employer. Our local legislators are working hard to prevent this from happening to our community, but our voices must also be heard by key legislative leaders in Hartford.
How Hospital Taxes Hurt Healthcare and The Economy
There are four measures in the Governor’s proposed budget that threaten local access to healthcare and the economy in Northeast Connecticut:
- Elimination of the small hospital pool, a mechanism by which the state returns an extra portion of the taxes paid in by hospitals back to small, independent community hospitals; this would cut approximately $2.8 million in funding from DKH.
- Changing the base rate period for determining how much hospital tax is due from a fixed to a rolling period; this would cost DKH $1.7 million in additional hospital taxes each year.
- Allowing, for the first time in the state’s history, municipalities to levy a property tax on nonprofit hospitals. Currently, the state provides PILOT (Payment In Lieu of Taxes) payments to cities and towns to make up for the loss of property taxes from exempt non-profits like colleges and hospitals. In this proposed budget, the state would cease making those payments and instead municipalities would have the option of charging non-profits a direct property tax to make up the difference.
The Town of Putnam’s proposed budget currently includes levying that property tax on Day Kimball Hospital. If it remains in the Town’s final budget that is passed by residents, it will result in another $546,000 in tax liability to DKH. - Returning hospital funding from its own line item in the state’s budget back into the general Medicaid line item, which would allow it to be cut in its entirety at any time through the Governor’s power of rescission. Legislators including Senator Mae Flexer and Representative Daniel Rovero had successfully worked to break hospital funding out into its own line item just last year in order to limit the power of rescission to just 5% of the total hospital funding.
Day Kimball Healthcare is the major provider of healthcare in Northeast Connecticut and is also the region’s largest employer. DKH employs over 1,100 people, more than 80% of which live in Northeast Connecticut – 13% in Putnam alone.
According to a recent economic impact report compiled by CHA, Day Kimball Healthcare provides more than $287 million in economic impact to the local economy each year, and dollars spent by DKH employees on groceries, clothing, mortgage payments, rent and at local shops and restaurants generate an additional 1,510 jobs for the local economy.
We’re fortunate to have the strong support of our local legislators, who recognize and understand the crucial foundational role Day Kimball plays in the fabric of Northeast Connecticut. But we must also make our voices heard by the Governor and the rest of the legislative leadership in Hartford. Cutting and taxing hospitals is simply bad policy and will only serve to negatively impact our state and its residents.
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