Legislative Committees Advance Spending and Revenue Packages

On Tuesday, March 31, the Appropriations and Finance, Revenue and Bonding Committees released their respective spending and revenue adjustments to the fiscal year (FY) 2027 budget.  The roughly $29 billion spending proposal seeks to increase FY 27 spending by 0.8% above the current levels adopted in the 2026-27 biennial state budget.  Of particular interest to hospitals and health systems is the inclusion of the Connecticut Hospital Association’s (CHA) hospital tax model in the revenue side of the budget.

As adopted by the Finance, Revenue and Bonding Committee, SB 84, An Act Concerning Revenue Items To Implement The Governor’s Budget, includes hospital tax revisions that align with the new hospital tax model for which CHA has been advocating.  While the Appropriations Committee did not include CHA’s specific hospital tax language in its proposed spending package, legislators voiced support for advancing a new model designed to maximize federal revenue and strengthen care delivery — consistent with the approach adopted by the Finance, Revenue and Bonding Committee.

“We appreciate the Finance, Revenue and Bonding Committee’s proposal reflecting hospital tax levels discussed with hospitals, as well as legislators’ recognition of the importance of adopting a hospital tax model that directs proceeds back to patient care,” CHA said in a statement.  “We look forward to continuing to work together to protect and strengthen access to care for communities across Connecticut.”

CHA urges elected officials to continue the momentum in advancing a hospital tax model that maximizes federal support for patient care, following five key provisions:

1. Increase the value of the state’s tax on hospitals to leverage the maximum amount of federal revenue available
2. Use all net proceeds of the increased tax to support patient care delivered by hospitals
3. Ensure that all non-governmental hospitals participate in the tax program (including Connecticut Children’s and Waterbury Hospital) and reserve the benefit of the tax to only those hospitals that pay the tax
4. Seek to secure a five-year deal with the federal government
5. Preserve the state’s current $500 million share of the tax benefit in the coming fiscal year, while not expanding that share

For months, CHA has engaged legislative leaders and members of the Lamont administration in discussions about the future of the hospital provider tax and related provisions contained in the state budget, advocating for stability and more predictability.

In the coming weeks, legislative leaders will reconcile the two packages and negotiate with the governor’s office and the Office of Policy and Management (OPM) to craft a revised FY 27 budget adjustment agreement.  Both chambers of the General Assembly will then vote on the final spending and revenue proposal, which must be approved before the legislature adjourns on May 6.

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Hospital Leaders Press for Patient-Focused Hospital Tax Reform at Capitol