BRATTLEBORO — As town leaders weigh a proposed municipal tax hike to help the fiscally ailing Brattleboro Memorial Hospital, administrators at the southeastern Vermont healthcare hub estimate their multiyear budget deficit has risen to at least $30 million.
The hospital has yet to submit a spending plan to the state for the coming fiscal year, having missed a July 1 filing deadline and July 24 extension. But its administrators are reporting shortfalls of $16 million for the last fiscal year — four times their initial estimate, or 13% of a $119 million budget — and a projected $14.5 million for the current year, or 11% of a $130 million budget.
“It has actually taken us six to seven months to finish our financial audit and figure out what the state of the finances were,” acting co-CEO Elizabeth McLarney said on the July 21 episode of the local Vermontitude webcast. “While some of this news is very shocking to people, it was because our financial reporting systems were in shambles.”
McLarney and fellow acting co-CEO Tony Blofson, both doctors, became administrators last fall after former hospital President Christopher Dougherty exited without explanation in November and former Chief Financial Officer Laura Bruno departed amid similar silence in December.
The hospital hasn’t publicly addressed the reasons for the changes in administration and accounting, but has acknowledged receipt of a $1 million state grant to study and help stabilize its finances.
Administrators have yet to release the resulting audit, although they confirmed the deficit estimates for the last two years. They also cautioned that shortfalls date back even farther, but have yet to report an overall timeline or total.
“Our multiyear losses didn’t start in 2025 and go back years,” hospital spokesperson Gina Pattison said in a statement Monday. “Our hope for FY27 and FY28 is to climb our way to a breakeven operating margin. Our budget for FY2027 will reflect a meaningful step towards that goal.”
As for its state budget submission, the hospital said it was delayed “due to some logistical issues” and would be delivered later this week.
In response, state regulators said they’d address the situation at an Aug. 14 hearing of the Green Mountain Care Board, which assesses and must approve budgets.
To cut costs, the hospital has proposed the closure of its birthing center, which is projected to end the current fiscal year with a $4.8 million loss — one-third of an estimated $14.5 million deficit for all departments for the period that ends Sept. 30.
“Declining birth volumes, rising operating costs and persistent difficulties recruiting and retaining obstetric clinicians have made the current model increasingly difficult to sustain without significant external support,” the hospital said upon announcing the center’s potential closure “within the next six to nine months.”
The Brattleboro Selectboard is set to vote Tuesday on whether to schedule a special Town Meeting for Sept. 2 to debate whether to raise a yet-to-be-determined sum of tax money to aid the obstetrics unit, which is a half-hour away from its nearest counterpart in Keene, New Hampshire.
The issue has sparked a July 14 rally of 100 hospital supporters as well as dozens of questions on social media, with many residents echoing the sentiment of local Facebook commenter Justin Howard: “I do support the birthing center but our taxes are plenty high.”
Gov. Phil Scott has also voiced concerns about the proposed one-time municipal tax hike.
“That’s not going to fix the problems,” Scott said Thursday at his weekly press conference.
Instead, Scott pointed to a recent letter by seven Vermont medical groups urging the state Agency of Human Services to help the hospital by raising Medicaid obstetric reimbursement rates to match those paid for other primary care services.
“The letter is going down the right path,” said Scott, suggesting it could lead to a more sustainable solution. “We are looking into that now.”
Agency of Human Services officials recently traveled to Brattleboro to meet with hospital administrators.
“We have finite amounts of funding that’s available, but we’re absolutely willing to work with and will continue to work with our providers,” agency Secretary Jenney Samuelson said at Thursday’s press conference.
This is the second year in a row the hospital has missed its budget submission deadline with the Green Mountain Care Board. Last summer, administrators said they were too busy dealing with their financial challenges to file on time.
“Our financial condition has really interfered with preparing and submitting the documentation,” Bruno, the since-departed CFO, told regulators last August. “I’ve been fully focused on the survival of the hospital.”
The care board wasn’t swayed.
“It is really hard to properly evaluate your budget when we just have discrepancies, inconsistencies and unanswered questions,” replied board member Jessica Holmes, a professor of health economics and public policy at Middlebury College. “I don’t think I’ve ever said that to a hospital in the 10 years that I’ve been doing this.”
Regulators went on to ask the hospital in October to recalculate its budget or risk becoming the first to receive a state-appointed monitor under a new law adopted to control costs. After administrators revised the numbers, the care board simply issued a warning in January, although it could still call for some sort of intervention during the coming budget review process.
