State checkbook reveals $1.2 billion in out-of-state expenditures

State checkbook reveals $1.2 billion in out-of-state expenditures

By Ike Fredregill, Cowboy State Daily

Wyoming state government spends millions of dollars in other other states and Connecticut companies get more money than any other state, according to data released by the Wyoming State Auditor’s Office.

In calendar year 2018, Wyoming spent at least $1.2 billion out-of-state, nearly $247 million of which was spent in Connecticut on health care, alcohol and data for grant proposals.

The information is contained in what has been dubbed “Wyoming’s checkbook,” a list of 4.9 million state expenditures made over the last six years.

The data was released in January by state Auditor Kristi Racines, ending a years-long battle between the state auditor’s office, American Transparency, which operates “openthebooks.com,” and the Equality State Taxpayers Association.

“It’s critical this information is available to the public,” Racines said.

The list does not contain every tax dollar spent, Racines said, because some expenditures are confidential. 

“There are a lot of dollars that are confidential such as benefit payments to direct recipients,” she said. “Those are all confidential, and we’re talking big dollars.”

The information released shows about 21 percent of total state spending occurred outside of Wyoming.

“When you look at the expenditures as a whole,” Racines explained, “that 21 percent comes down.”

Without all of the data — confidential and otherwise — on hand, she said it was impossible to compare Wyoming’s out-of-state spending to other states.

Health Care

Health care for state employees was Wyoming’s largest out-of-state expenditure — $229.8 million — in calendar year 2018.While the State Employees Health Insurance Group is based in Wyoming, Ralph Hayes, the insurance group director, said a large portion of the healthcare checks are funneled through CIGNA, a global health service company with offices in Connecticut.

“A lot of the reason we need CIGNA is expertise,” Hayes explained. “We run this system with nine people. We’re providing health insurance for 37,000 members. We do not have the staffing, systems or expertise to review the medical claims, make sure they are appropriate them, adjudicate them and make payments to the providers.” 

The insurance group is self-funded, but CIGNA writes checks on its behalf, he said. The state then covers those checks by writing its own to CIGNA, Hayes added.

“Most of those are being sent to the medical providers back here in Wyoming,” he explained. 

Health care costs have inflated exponentially in the last two decades, and Hayes said the trend will likely continue.

In 1999, the state spent about $37.7 million on health care for state employees. By 2018, the state’s employee health care costs were approximately $284.4 million, Hayes said.The state’s sparse population spread thinly across a large geographical area also plays a role in increased medical bills.

“We don’t have multiple hospitals in any given area to compete against each other,” Hayes said. “Basically, we’re seeing cost increases from our medical providers. You can charge what the market will bear.”

Despite its name, he said the insurance group also provides insurance to University of Wyoming employees, community college employees and Natrona County School District employees, which inflates the number of checks being written to CIGNA.

Booze

After healthcare, alcohol is Wyoming’s second largest expenditure in Connecticut.

When the U.S. ended the prohibition in 1935, the federal government put the responsibility of regulating alcohol purchases in the states’ hands, Wyoming Department of Revenue Director Dan Noble said.

“Wyoming is a control state, which means we control the sale of alcohol in Wyoming,” Noble said. “(The Department of Revenue’s) Liquor Division is the sole wholesaler of alcoholic spirits and wine in the state of Wyoming.”

The state sent about $15 million to two companies — Diageo North America and Diageo Americas — in Connecticut for spirits in 2018.

“They are the largest supplier of alcohol in the world,” Noble said. “Diageo sells things like Crown Royal, Johnny Walker, Captain Morgan and just about any other major alcohol brand.”

The global corporation might be one of the state’s biggest suppliers of alcohol, but they are far from the only one.

“We will special order from virtually anybody that sells a product that can be brought into the country legally,” Noble said. “We buy product from within our state as well, like Wyoming Whiskey and Backwards Vodka.”

Once the state purchases the alcohol, he said the liquor division then sells it to about 1,200 licensed distributors throughout Wyoming at a markup of 17.6 percent.“

That money goes covering our costs and the state also utilizes that for general fund money as well,” Noble explained.

What’s left?

Once alcohol and health care are subtracted from the checks Wyoming sent to Connecticut in 2018, the remaining expenditures are scattered all over the board: The Wyoming Department of Transportation spent about $25,000 with Whelen Engineering Co., a manufacturer of audio and visual warning equipment for automotive, aviation, and mass notification industries; the Wyoming Department of Corrections spent about $2,700 with Al Hannah Clothing, an Islamic clothing supplier, and The Wyoming Department of Health spent about $44,000 with On Target Health Data LLC, a company whose website lists a single employee and conducts survey research, behavioral risk factor surveillance system research, program evaluation and health risk appraisal.

Based on the data provided in the checkbook, Wyoming spent the second largest portion — $121 million — of its 2018 out-of-state expenditures in Missouri. Alaska received the least amount of Wyoming’s money in 2018 — a total of about $5,000 for companies in The Last Frontier state.

The checkbook is dense, but Racines said she is working on a website to help Wyoming citizens understand how the state spends their tax dollars.

“We want this data out there in some kind of a digestable format,” she said. “What we envision for the website is any citizen can go on there and see what agency is spending what and where.”

The auditor she said she hopes to have the website up and running before the end of the year.

“We’re spending public funds,” Racines said. “We are stewards of the taxpayer dollar — all of them — and it’s important to understand where that goes.”

Research assistance for this story was provided by Kevin Lewis of the Equality State Taxpayers Association.

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