The mirror cracked from side to side
/Having inherited an unprecedented $3.7 billion deficit, Malloy proposed the hospital provider tax one month after taking office in January 2011.
It was to be a tax in name only.
The industry would pay $350 million per year to the state, which would redistribute and return every penny back to hospitals — plus $50 million more.
This back-and-forth arrangement — which is common in most states — would enable Connecticut to qualify for huge federal reimbursements through the Medicaid program.
But things began eroding almost right away. As state government struggled frequently with budget deficits over the next six years, the tax grew while the payments back to the industry shrank — despite an increase in the federal reimbursement rate.
Hospitals also could not even rely on the shrinking payments they would see in the adopted state budget. Legislatures routinely ordered Malloy to achieve massive savings once the fiscal year was underway — often with little guidance as to how those targets were to be met. And, at times, the administration would order emergency reductions to the hospital payments.
And so on. Details, found in the article itself, are sordid, but basically the Hartford Looters came up with a new tax , sold it as a non-tax, and then just couldn’t resist looting the federal funds that came in to “balance’ Hartford’s tax. So we have another $900 million in spending, with no way to pay for it.