Hospitals, business groups hail special session
Hospitals and business groups Wednesday hailed news that the General Assembly had cut taxes and restored funding in areas critical to their priorities during Tuesday's special session, while a $1 million cut to statewide tourism efforts was seen as a reduction that could be absorbed.
Members of the Connecticut Hospital Association, which had launched a media and print campaign to restore a funding cut in September when Gov. Dannel P. Malloy instituted emergency measures to balance the budget, saw $30 million in benefits from the latest General Assembly action. That's about half of the $63 million in cuts to Medicaid reimbursements state hospitals had been forced to swallow when Malloy announced a major budget "rescission" in September using special emergency powers.
But hospitals actually made out even better when considering the impact of federal matching funds and the fact that the budget revision restores $16 million of overdue payments to hospitals that the Malloy administration had previously threatened to withhold permanently, according to The Connecticut Mirror.
"The legislature is paying attention to the hospitals," Tony Sheridan, chief executive of the Chamber of Commerce of Eastern Connecticut, said in a phone interview.
William Stanley, a vice president at Lawrence + Memorial Hospital, said he expected at least $2 million to be restored as a result of the special session's budget action. Still, "several million" dollars in cuts will not be restored, on top of about $9 million in budget reductions that L+M had to withstand in the budget first adopted by the legislature, he said.
"We're grateful the legislature took the initiative to rescind the governor's poorly-thought-out rescission," Stanley said in a phone interview. "These cuts were entirely too severe."
A spokeswoman for Hartford HealthCare, which operates Backus Hospital, said funding restoration would amount to $20.7 million for the institution systemwide and about $2.4 million for Backus. That's only about a 38 percent restoration of the $55 million payment cut Hartford HealthCare initially absorbed, said spokeswoman Rebecca Stewart.
"These are not grants," she said in an email. "They are the state's payments for services we have already provided. A full quarter-year of the state's Medicaid reimbursements will go totally unpaid."
Jennifer Jackson, chief executive of the Connecticut Hospital Association, said the legislature "took an important step" toward reducing the effect of statewide budget cuts on hospitals and patients.
Still, she added in an emailed statement, hospitals in Connecticut have lost $1.3 billion in funding over the past five years.
"These massive cuts, year in and year out, are an ongoing threat to patient care," Jackson said. "The situation is simply not sustainable. The next critical step is to address this systemic funding problem in the next legislative session."
The next session will also be critical to the business community, said Brian Flaherty, senior vice president of the 10,000-member Connecticut Business & Industry Association, in a phone interview.
"The changes (in the special session) are a necessary step in the right direction," Flaherty said. "We hope it becomes a turning point."
The tax changes approved Tuesday were seen as modest, costing the state only $1.5 million annually when they all are in place two years from now. But Flaherty saw the fact Democrats were willing to compromise on two unpopular technical changes to tax and reporting requirements as a positive sign that the 2016 General Assembly session will open up a new dialogue on how to improve business conditions in the state.
Flaherty also saw positive glimmers in Malloy's previous call for a "second-chance society" that will reduce costs while potentially reforming the state's prison system. He would like to see the state tackle other areas in which good policies such as moving toward home-based care and reforming the state's pension system can also bring financial savings to taxpayers.
One budget area critical to southeastern Connecticut that saw a reduction during the special session was funding for tourism.
The state's three regional districts were cut by a total of $80,690 a year, or about $26,900 apiece, in each of the 2016 and 2017 fiscal years, according to Ed Dombroskas, executive director of the Eastern Regional Tourism District. Separate cuts will cost the eastern district about $2,800 a year, bringing its total annual loss of funds to nearly $30,000, Dombroskas said.
Connecticut's statewide marketing campaign "Still Revolutionary," which was to receive $9.5 million annually, took a $1 million annual hit this fiscal year and next. In addition, any money left unspent at the end of the current fiscal year will be eliminated.
But Sheridan, the local Chamber executive, said he was happy tourism didn't see a more drastic cut. For two years under Gov. M. Jodi Rell, tourism promotion was essentially cut to nothing.
"It could have been much more devastating," he said.
Mystic Aquarium, which was to receive more than $500,000 annually this fiscal year and next, will have more than $20,000 cut each year.
Dombroskas, who took part in meetings with state tourism officials this week, said the cuts would not jeopardize an ongoing effort to embed the regional districts' websites in the state's tourism site, ctvisit.com.
"That's one of our top priorities," he said. "That's going to be a very robust and substantial website, giving us access to more than a million people who visit the state's site every year. The state's spending close to three-quarters of a million dollars developing and implementing it."
Still lurking, Dombroskas said, is the prospect of further cuts. The legislation adjusting the budget gives the governor the authority to cut budgets by an additional 5 percent and the secretary of the state Office of Policy and Management the authority to impose 1 percent cuts.
"So there's the potential for us to see another 6 percent reduction," Dombroskas said. "We hope that doesn't happen."
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