Alarm Bells Sound: Hospitals, Cities and Towns Fear Malloy Cuts are Just the Beginning; GOP Lawmakers Take a Stand with Hospitals

budgwt cuts 2If you are a Connecticut hospital official or a mayor or first selectman, hearing the governor say he is cutting $30 million from the state budget just two and a half months into the fiscal year may cause you to spit out your coffee. If you are among the most vulnerable—the drug addicts, those in need of mental health services or the very poor, your lot in life has less of a chance of getting any better. If you are a hospital official, you just slapped across the face.

The fact is, Gov. Dannel Malloy’s budget cuts are smacking those can least afford it. And this early in the budget year, such authorized cuts—or rescissions—don’t bode well for the coming years.

In his effort to stave off budget deficits while protecting the state employee unions and avoiding yet another tax increase, Malloy has little choice but to make the cuts where he can.

Republican legislative leaders stood with hospital officials Tuesday morning, bemoaning the cuts hospitals face. The leaders made clear “they oppose Governor Dannel P. Malloy’s $103 million in new budget cuts, including $63.4 million in reduced Medicaid payments to hospitals. The result of these cuts would increase hospitals’ tax liability to the state by over $240 million between fiscal year 2015 and fiscal year 2016, raising their state tax burden to almost $500 million annually,” they said.

State Senate Minority Leader Len Fasano had tough words for Malloy. “The governor’s reckless cuts directly threaten the financial survival of many Connecticut hospitals. These are not small trims here and there; these are changes that will put incredible strain on hospitals, threatening health care access and quality and most likely hurting Connecticut’s most vulnerable including seniors, children, lower income families and those with mental health needs,” he said.

It’s an ugly situation that also has municipal leaders quietly worried sick (those The Shad talked to did not want to be identified as criticizing the governor at this point). But cuts to cities and towns—even non-education cuts—eventually lead to local property tax increases or reductions in services. Obviously that’s not what the municipal CEOs want to hear.

As a Democrat, it’s tough to understand how Malloy thought cutting funds to agencies that help the most at risk was a good idea. The move sets up an interesting dynamic.