SB 84, An Act Concerning Revenue Items To Implement The Governor’s Budget

TESTIMONY OF THE CONNECTICUT HOSPITAL ASSOCIATION
SUBMITTED TO THE FINANCE, REVENUE AND BONDING COMMITTEE

Wednesday, March 11, 2026

The Connecticut Hospital Association (CHA) appreciates this opportunity to submit testimony concerning SB 84, An Act Concerning Revenue Items To Implement The Governor’s Budget.  CHA opposes provisions of the proposed budget related to the hospital tax as we believe there is a better approach than what is proposed in SB 84.  CHA is eager to work with this committee, the governor’s administration, legislative leaders, and members of the General Assembly to adopt an approach that would maximize federal resources to support patient care across Connecticut.  CHA supports provisions of SB 84 that would eliminate certain occupational license application and renewal fees to promote recruitment and retention of the healthcare workforce.

Connecticut hospitals make our state stronger by delivering nationally recognized, world-class care, supporting jobs and economic growth, and serving communities across Connecticut.  Every day, hospitals improve access, affordability, and health equity — providing care to all patients regardless of ability to pay.  At the same time, hospitals invest in their workforce and local communities, even as they navigate significant financial and federal challenges.

The state has an opportunity in this budget to develop a path forward on the hospital tax that best supports patient care and to advance policies that support the healthcare workforce.

Taxes On Hospitals

This state fiscal year, hospitals will pay $820 million in taxes.  Of that amount, the state retains a little more than $500 million for its own purposes and uses approximately $300 million to draw down federal matching dollars to support Medicaid payments to hospitals.  Under the governor’s budget proposal, in state fiscal year (FY) 2027, the tax will increase by $100 million to $920 million.  Waterbury Hospital will become exempt from the tax but will still be entitled to tax-funded Medicaid payments, and Connecticut Children’s will be prohibited from participating in the tax program. 

If the provisions of SB 84 were implemented, the state would increase its gain by an extra $53 million (this is in addition to the $500 million it already takes).  Of the $40 million set aside to support hospitals from the revenue generated from the tax increase, $15 million is designated to Waterbury Hospital, which would no longer pay the tax, and the remaining $25 million would be divided among the 23 remaining taxpaying hospitals. 

We believe a new perspective is needed on the hospital tax—one that views the tax as a method to maximize federal dollars for patient care delivered by hospitals and to chip away at the $1.5 billion annual loss that Connecticut hospitals face providing care to Medicaid (HUSKY) patients; all while preserving the state’s annual share of the existing tax.  We think this is a perspective that can be shared and supported by the state and hospitals, alike. 

With federal approval, going down this path together would mean:

  • Increasing the value of the tax to leverage the maximum amount of federal revenue available
  • Using all net proceeds of the increased tax to support patient care delivered by hospitals
  • Ensuring that all hospitals that wish to participate in the tax program can (including Connecticut Children’s) and reserving the benefit of the tax to only those hospitals that pay the tax
  • Securing a five-year deal with the federal government
  • Preserving the state’s current $500 million share of the tax benefit, while not expanding that share

We believe we are at a moment of significant opportunity that may not exist in the future.  It is why we believe we should align quickly on a plan that maximizes federal revenue and uses that revenue to support patient care provided by hospitals.

Occupational License Application and Renewal Fees

Sections 14-28 of SB 84 eliminate license application and renewal fees for those seeking employment or employed as nurses, dental hygienists, mental health clinicians, occupational therapists, paramedics, physical therapists, electricians, HVAC workers, plumbers, sheet metal workers, and teachers.  CHA supports this provision as a way to recruit and retain key members of the healthcare workforce. 

The elimination of these fees recognizes the critical importance of investing in the state’s healthcare workforce.  By removing financial barriers to licensure, certification, and its maintenance, Connecticut can remain an attractive destination for essential healthcare professionals to live and work.  As workforce shortage projections persist throughout healthcare, CHA appreciates the state’s willingness to acknowledge the pressures and for doing its part to provide some assistance. 

There are additional healthcare professions not currently included in the bill that are essential to sustaining the care delivery system every day in Connecticut.  We would encourage the committee to consult with the Departments of Public Health and Consumer Protection and amend the bill to incorporate additional critical roles including, but are not limited to, pharmacists, radiographers, respiratory therapists, surgical technologists, medical assistants, phlebotomists, dieticians, speech and language pathologists, audiologists, doulas, and community health workers.

Thank you for your consideration of our position.  For additional information, contact CHA Government Relations at (203) 294-7301.