PROVIDENCE — The heads of four Rhode Island hospitals testified yesterday that their medical institutions are teetering on the brink of financial disaster.

And they pleaded with key lawmakers to help — or at least not hurt — their hospitals in the 2008-09 state budget being debated before the House Finance Committee.

Governor Carcieri’s proposed budget would force hospitals to pay $32.7 million more for their licenses in the coming year, a move his office said is necessary to help close a deficit of at least $348 million. The proposal, along with the rest of the governor’s cost-cutting plans, now rest with the General Assembly.

“We need your help. The budget that we’re looking for is a life preserver. The one that’s out there now is made out of concrete,” Charles S. Kinney, president and chief executive officer of Westerly Hospital, told the committee. “The entire budget … is just going to have a further denigration on the finances of the hospitals, which are precarious.”

Kinney was joined at the State House yesterday by the heads of Roger Williams, St. Joseph, and South County hospitals.

Each institution finished the previous fiscal year in the red. Their losses ranged between $386,000 and $6.6 million, according to data provided by the Hospital Association of Rhode Island.

“We can’t sustain losses of that magnitude,” said Louis R. Giancola, president of South County Hospital. “I think the community hospitals are in trouble. I hate to ask, yet again, but we need your help at least in enacting things that are not going to make it worse.”

The debate over hospital financing lies in the way Rhode Island reimburses hospitals for “uncompensated care” — the cost of treating people without insurance, or those who don’t pay their medical bills.

State officials each year apply licensing fees to hospitals, but the fee is later returned to the institutions in the form of uncompensated care costs covered by federal Medicaid dollars. This year, however, Carcieri deviated from the standard arrangement.

He proposed increasing the licensing fee by a total of $32.7 million, but froze the level of uncompensated care reimbursement. (A separate proposal would give hospitals $8 million to shift their reimbursement systems.)

At yesterday’s hearing, Rep. John Patrick Shanley Jr., D-South Kingstown, asked the governor’s staff why hospitals were targeted.

“The best answer that we can give … is that we needed to make up money in the budget and in discussions with the budget office, it was agreed upon to raise the licensing fee,” said Gary Alexander, director of the state Department of Human Services. “This is not something that would normally have happened in a good year.”

The cost of care for the uninsured in Rhode Island is substantial.

The hospitals estimate they spent nearly $125 million for “charity care” in 2006, the most recent data available. The state estimates the hospitals’ cost at $26 million.

While each side calculates the tab differently, they agree that Rhode Island’s public hospitals do not have the right to refuse patients without health care.

Licensing regulations require that hospitals provide free care to uninsured people whose incomes are below 200 percent of the federal poverty level (or $35,200 for a family of three) and discounted care on a sliding scale to uninsured people with incomes between 200 and 300 percent of the poverty level.

Hospital officials yesterday said there’s reason to believe their uncompensated care costs will skyrocket in the coming year.

The governor has proposed cutting subsidized insurance for the low income, known as RIte Care, for more than 2,800 immigrant children and another 7,400 adults in the coming months, a move that increases the number of uninsured Rhode Islanders by more than 8 percent.

Already, one in eight Rhode Islanders, or 13 percent of the population of people under the age of 65, are uninsured, according to a report issued last fall by the state health insurance commissioner.

“Any reduction of RIte Care eligibility we believe is harmful to society; it also has a financial impact,” hospital association president Edward J. Quinlan said. “If you lower eligibility for RIte Care, those subscribers, those enrollees, those children, are still going to require care and they’re going to come to hospitals.”

Meanwhile, the hospital license-fee plan is the largest revenue increase in the governor’s proposed budget. Quinlan called the move a “tax hike,” despite Carcieri’s pledge to avoid tax increases.

“Some have said there are no tax increases in this budget,” Quinlan said. “This would suggest there is. Then you get into, ‘It’s just a fee.’ I worked in Congress for five years and I heard that nonsense.”

Carcieri spokesman Jeff Neal later clarified the governor’s position: “Governor Carcieri has noted that his proposal does not rely on increases in broad based taxes to balance the budget. That statement is correct. Regardless of the semantic debate about whether a license fee is or is not a tax, the fact is that it certainly doesn’t constitute a broad based tax such as the income, sales or property taxes.”

House Finance Committee Chairman Rep. Steven M. Costantino, D-Providence, said yesterday that he doesn’t want to take $32 million from Rhode Island hospitals.

“I’m open to alternatives for how I can come up with a $32-million hole in the budget,” he said. “It’s one of those years that it’s very, very hard to find alternatives … I don’t see many sources of revenue that will be able to satisfy what they’re saying their needs are.”