- The Insurance Department
Farce def: a foolish show; mockery; a ridiculous sham
When government talks about budget cuts, it pays to listen carefully to understand exactly what it is saying. Usually, when government cuts its budget, it cuts some increase in the budget, rather than the budget itself. The result is higher government spending every year. People have clued in to this farce, so it would appear government is resorting to a new definition of cuts so the spending party can continue.
In the case of Wyoming’s dreaded eight percent budget cut, the state budget isn’t getting cut by eight percent. Instead, part of the 2014 general fund appropriation from some government agencies is getting cut by eight percent. Confused? Please read on.
For example, the Insurance Department regulates the business of insurance in the State of Wyoming. It is an agency with a 2013-2014 biennial budget of almost $61.6 million. Its eight percent cut amounts to $240,000. Eight percent of $61.6 million is $4.9 million; so how did this get reduced to $240,000?
Well it, like most other Wyoming government agencies forced to cut their budgets, doesn’t have to cut eight percent from its budget, it has to cut eight percent from its general fund appropriation for 2014.
Agencies get money from three main sources: the general fund, federal funds and other funds. The general fund gets its revenue from a part of the sales and use taxes, severance taxes, state investment income, and a few other sources. Federal funds come from the federal government, and other funds come from every other way the government has figured out to pick your pocket.
In the 2013-2014 biennium budget, the Insurance Department gets $6 million from the general fund. Most of the rest of the Insurance Department’s income comes from other funds such as insurance premiums, insurance company taxes and investment income.
In 2014, its general fund appropriation is $3 million. Eight percent of $3 million is? You guessed it — $240,000. Not $480,000 and for sure not $4.9 million.
The Insurance Department uses its general fund allocation to pay for part of the Wyoming Health Insurance Pool. This pool assists people below 250 percent of the Federal poverty level who may not have the resources to pay for insurance. The Insurance Commissioner, Tom Hirsig, said during his testimony to the committee, “the cuts will not affect the pool or its participants.”
It won’t affect government employment either. When it comes to job cuts, the Insurance Department has no “Authorized Employees” funded out of the general fund, so we’ll see no reduction in jobs for bureaucrats.
So those wringing their hands over the collapse of big government spending needn’t have bothered. Of course, those who thought the government might become less of a burden on their pocketbooks have no reason to cheer either. As we can see with this and other examples, the eight percent budget cutting exercise is little more than a sham.