Business leaders in Milford are urging residents to speak out against a state budget proposal they say could have a severe impact on Milford Hospital.

According to the website Protect My Hospital, Gov. Dannel Malloy’s budget proposal cuts $207 million from hospitals in fiscal year 2014 and $341.5 million in 2015.

“A $550-million cut to hospitals will shred the state’s health care safety net and devastate hospitals — affecting patients, employees, the economy and every community in the state,” the website says.

The Milford Chamber of Commerce alerted members to the proposal last week, and urged them to contact their legislators and ask them to oppose the spending plan.

“If passed, this budget will cause major financial hardship and have a devastating impact on Milford Hospital, and every hospital in the state of Connecticut, affecting patients, employees and our communities,” said Kathy Alagno, Chamber director.

Alagno said Milford Hospital plays a critical role in the local economy.

“Not only are they our city’s largest employer with 771 staff members, but they are also the health care safety net for residents of Milford, West Haven, Orange, and Woodbridge,” Alagno said. “Whenever our community members need high-quality, safe medical care, Milford Hospital is open and ready to help — 24 hours a day, seven days a week.”

The Chamber estimates that Milford Hospital contributes more than $159 million to the local economy through jobs and promotion of economic activity.

Hospital spokeswoman Karen Kipfer agreed that the proposed budget cuts would be devastating. She said the suggested cuts are “unprecedented,” and would see Milford Hospital experience a $9.8-million reduction in reimbursement between now and 2015.

“As a result, we would be forced to cut programs and services that our patients, staff and our community have come to rely on,” Kipfer said.

Hospital officials argue that Milford Hospital is a cornerstone in the community, providing high-quality, safe health care to residents and supporting the economy. They say many Milford doctors and businesses depend on the business the hospital generates.

She said hospital administration and staff have reached out to legislators to discuss the impact this budget would have on Milford Hospital and other hospitals.

“I believe that our patients and our community need to do the same and urge them to oppose the governor’s proposed budget,” Kipfer said.

On the other hand, various news sources around the state point out that the governor believes the proposed reductions, mostly in reimbursements for uninsured patients, would not have such a severe impact as hospital officials say because the number of uninsured patients is expected to decline.

In fact, according to data on the state website, Malloy’s budget shows relatively flat funding for hospitals: $1.72 billion in 2014 and $1.77 billion in the following year, compared with $1.75 billion this year.

“The proposed plan does reflect a decline in state reimbursement for care the hospitals give, free of charge, to people who don’t have medical insurance,” the Hartford Courant reported in March. “That’s because uncompensated care is expected to decline starting in 2014, as federal health care reforms require everyone to have coverage. The state, in fact, has already seen some savings as the state opened up Medicaid coverage to more people.”

As the debate continues, the Milford Chamber board of directors voted to support Milford Hospital against the proposed budget.

The Chamber is asking members to go to the website protectmyhospitalct.org and follow the links to log a comment.