Hartford Business Journal

6 Hartford Business Journal • November 7, 2016 www.HartfordBusiness.com TOP STORY CHA, hospitals launch legal fight over state hospital tax The Connecticut Hospital Association and Connecticut hospitals launched legal action last week to contest a September ruling by two state agencies that the so-called hospital tax is legal. In the first step, hospitals appealed the declaratory ruling of the state departments of Social Services (DSS) and Revenue Services (DRS), argu- ing that the hospital tax was illegally implemented. Second, hospitals are petitioning the Centers for Medicare & Medicaid Services (CMS) in an effort to show that the state's reimbursement and tax scheme violates the federal Medicaid Act. In the DSS/DRS appeal, the hospitals assert that the hospital tax, among other things, violates the U.S. and Connecticut Constitutions and federal and state statutes and was outside of the departments' authority to implement. They are asking for an end to the tax. In the CMS petition, the hospitals argue that the hospital tax, which now totals $556 million a year and exceeds the corporate tax rate by nearly 30 times, is bad public policy and violates federal law. Connecticut hospitals are also asking CMS to compel the state to amend its Medicaid State Plan to bring Connecticut's Medicaid rates and payments, as well as the hospital tax, in compliance with the federal Medicaid Act. MANUFACTURING Pratt, Machinists union start contract talks Pratt & Whitney and machinists union negotiators kicked off contract nego- tiations last week to replace an existing labor pact that expires Dec. 4, when union members will vote on the company's final offer. Mike Stone, assistant directing labor representative for International Associa- tion of Machinists and Aerospace Workers District 26 and chief union negotiator, said talks began Nov. 1 in Cromwell. The talks involve members of union Local 1746 in East Hartford and Local 700 in Middletown. This round of contract talks occurs under markedly different circumstances than the last round of talks in 2013. Pratt officials, faced with what they say is a nearly unprecedented period of demand for its newest commercial and military jet engines, have said they plan to hire about 8,000 workers in Connecticut through 2026 to keep pace with burgeoning production demand over the next decade. Pratt has around 9,500 Connecticut employees — about a third of those hourly workers and union members — split between its Middletown plant and its East Hartford headquarters. In contrast, Pratt three years ago was in the midst of a series of layoffs and early retirement initiatives, as it marked time until new engine programs could start to reinvigorate production lines. – Howard French | Journal Inquirer ECONOMY & LABOR Workers comp insurance rates dropping nearly 11 percent Workers compensation insurance rates are dropping for the third year in a row, this time by 10.9 percent, Connecticut Insurance Commissioner Katharine L. Wade said last week. The decreases are a result of continued reduction in the number of workplace injuries and claims filed in the state, Wade said. The department has approved a rate filing from the National Council on Com- pensation Insurance (NCCI) that decreases workers compensation insurance rates by 10.9 percent in loss costs and in assigned risk rate levels. NCCI annually collects data from the workers compensation market in Con- necticut and countrywide in order to annually propose rate adjustments for the ensuing year. There are more than 300 companies licensed to sell workers com- pensation insurance in Connecticut, Wade said. In 2015, the Department approved decreases of 3.9 percent for loss costs and 6.3 percent for assigned risk. New index ranks CT economy 38th with 'room to improve' Connecticut's economy ranked 38th in the nation for 2015, according to a new economic index developed by the state Department of Labor. Modeled on the department's comparable indices for municipalities, this new ranking, called the State Economic Indexes, was designed by the Labor Depart- ment's Office of Research. The annual composite index includes all 50 states and the District of Columbia and takes into account several economic metrics includ- ing wages, unemployment and employment rates, and business establishments. Colorado ranked first in the nation with the highest index last year (137.9), while New Mexico came in last (107.2), the table shows. Connecticut's 2015 ranking, with an index value of 118.9, is below the na- tional average of 124, but well above the 2013 ranking of 45th, says Jungmin Charles Joo, who wrote a synopsis for the Connecticut Economic Digest. Connecticut's index increased 18.9 percent over the last five years, below the nation's growth rate of 24.1 percent. EDUCATION UConn loses provost to Missouri university system UConn Provost Mun Y. Choi has been named the president of the University of Missouri system. UConn plans a national search for Choi's successor. UConn President Susan Herbst sent a letter to the university community last week, noting that Choi had been both provost and executive vice president of academic affairs for the last four years. He remains UConn provost until Feb. 1, then begins in his new position March 1. Choi first came to UConn in 2008 as the dean of the School of Engineering, and was named provost in 2012. He has been involved in critical university issues including a major faculty expansion and the implementation of Next Gen- eration Connecticut and Bioscience Connecticut. GOVERNMENT, POLITICS & LAW Lembo pegs budget shortfall at $42M Comptroller Kevin Lembo is projecting a $42 million budget shortfall for fiscal 2017. Connecticut's Budget Director Benjamin Barnes, secretary of the state Office of Policy & Management, on Oct. 20 projected a deficit of $5.7 million, stabilized by a $120 million state settlement with Royal Bank of Scotland (RBS). Former Torrington mayor to join Sullivan & LeShane as lobbyist Ryan Bingham, the former mayor of Torrington, will join the lobbying team of Sullivan & LeShane Inc. Nov. 28. After serving for eight years as Torrington's mayor, Bingham has most re- cently served as a division director at Winters Bros. in Danbury, and while he was mayor he also served as president of the Connecticut Conference of Mu- nicipalities. Retiring CT Supreme Court justice to work at law firm in Hartford Former Connecticut Supreme Court Associate Justice Peter T. Zarella will join the law firm of McElroy, Deutsch, Mulvaney & Carpenter LLP in January as a member of its appellate and alternative dispute resolution (ADR) practice groups. Zarella, who announced his retirement from the bench last week, was appointed to Connecticut's highest court in 2001. He will be based in the firm's Hartford and Southport, Conn., offices, serving clients on a nationwide basis. TRANSPORTATION Lyft ride-sharing service launches in CT Lyft, an on-demand ride-sharing service that competes with Uber, launched in New Haven last week as part of the company's larger rollout throughout Connecticut. Services to and from Tweed New Haven Airport and Bradley International Airport are also launching, the company said. The Lyft app matches riders with local drivers at the tap of a button. The ride can be paid for through the rider's mobile phone. BY THE NUMBERS $42M Connecticut's latest fiscal year 2017 deficit projection from Comptroller Kevin Lembo, which amounts to two-tenths of a percent of net budgeted expenditures. 10.9% The latest drop in Connecticut's workers compensation rates, which have now fallen for three straight years. 2.1M The number of registered voters in Connecticut as of last week, up from a prior record of 2,097,000, according to the Secretary of the State. 1,390 The number of layoffs hospitals blame on the state's escalating hospital tax, which they recently challenged in court as unconstitutional. TOP 5 MOST READ on HartfordBusiness.com ■ Lottery details when it learned of 5 Card Cash fraud ■ Workers comp insurance rates dropping nearly 11 percent ■ Former Malloy spokesman hired by NYC comptroller ■ CHA, hospitals launch legal fight over state hospital tax ■ UTC's Hayes defends free trade, urges public-private partnerships for skills building STAY CONNECTED For breaking and daily Greater Hartford business news go to www.HartfordBusiness.com. HBJ on Twitter: @HartfordBiz HBJ on Facebook: www.facebook.com/HartfordBiz HBJ on LinkedIn: www.linkedin.com/company/ the-Hartford-Business-Journal Daily e-newsletters: HBJ Today, CT Morning Blend www.HartfordBusiness.com/subscribe Weekly e-newsletters: CT Green Guide Weekly, CT Health Care Weekly www.HartfordBusiness.com/subscribe WEEK IN REVIEW P H O T O | H B J F I L E

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