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March 8, 2017

CT hospital group: Health systems worth $26.2B to economy

Connecticut hospital health systems contributed $26.2 billion to the state and local economies in 2015, according to a report released by the Connecticut Hospital Association (CHA).

The 2017 Economic Impact Report was released amid hospitals’ fight against Gov. Dannel Malloy’s proposal for a local-option property tax on hospitals and certain related properties, which are currently tax exempt. CHA has been airing TV commercials opposing the tax.

Hartford’s three acute-care hospitals would pay about $56 million a year to the city under the proposal.

The opposition comes despite a pledge from Malloy to reimburse hospitals with supplemental Medicaid funds to fully offset the local taxes they would pay, a pledge hospitals don’t trust based on past experiences. But a state official has said he would favor a "statutory or other assurances" requiring the state to keep its reimbursement promise this time.

CHA’s report said Connecticut hospital health systems employ 100,000 people and nearly every job produces another outside the hospital health system, for 199,000 total jobs. Hospitals generated $14.7 billion in annual local payroll, $9.9 billion in spending on goods and services, and $1.6 billion in capital spending, in 2015, but they are also taxed and face funding cuts, CHA CEO Jennifer Jackson said.

“Today they pay nearly 30 times the corporate tax rate,” Jackson said. “The proposed state budget would not only raise taxes further but would open a new door to letting municipalities tax hospitals. This is unacceptable and must stop. We need the state to invest in hospitals, which will strengthen our economy and build a healthier Connecticut.”

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