Mballar
05 May 2006, 03:54 PM
http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/050506dntexlawsuits.d06a42d.html
State owes, but it won't pay up
$13.2 million in unpaid bills frustrates creditors, lawmakers
06:55 AM CDT on Friday, May 5, 2006
By CHRISTY HOPPE / The Dallas Morning News
AUSTIN – The state has knowingly stiffed creditors and those owed large court judgments for the past four years, refusing to pay bills that legislators fully acknowledge are legitimate.
As of last month, the creditors list had reached 925 claims worth $13.2 million. And the amount is growing, as more claims come in and court judgments gather interest.
"We have chosen not to pay," Rep. Jim Pitts, who leads the House's budget-writing committee, said Thursday.
One of the creditors is the city of Bryan, owed $273,000 for utility work it provided for the state in 1999.
"We could always utilize that kind of money," said city finance director Kathy Davidson. "Anybody else, we would have cut off. They would be in the dark, literally."
But to a large extent, the state is immune.
Up until 2001, the Legislature routinely created a catchall spending measure, called the miscellaneous claims bill. Claims deemed legitimate that were more than $25,000 or more than four years old – sometimes the amounts owed were lost receipts or discovered belatedly through audits – were listed in the bill.
In addition, any final court judgments against the state that exceeded $250,000, usually involving discrimination or harassment suits filed by state employees, had to be approved specifically by the Legislature through the claims bill.
"We haven't had the miscellaneous claims bill go anywhere in the past two sessions," said Mr. Pitts, a Waxahachie Republican. "It was one of those things. The priority has been to balance our budget. Then it was education. So it hasn't been one of our high priorities."
Even now, with a budget surplus of more than $8 billion, the bills will probably remain unpaid.
Mr. Pitts said the Legislature is merely exercising its discretion. But he intends to create a special Appropriations Committee subcommittee during next year's regular session to examine the miscellaneous claims – likely by then to exceed 1,000 – and recommend action.
Other members of his panel expressed aggravation that so many claims have been left outstanding for so long.
"This is a terrible example," said Rep. Ruth Jones McClendon, D-San Antonio.
Rep. Glenn Hegar, R-Katy, agreed.
"I'm amazed we have [so many claims] and we don't pay people. I just can't believe that," he said. "If we lost, we lost. We owe somebody money."
The two pending court judgments that the state has refused to pay are costing more all the time, because interest accumulates on any judgment that goes unpaid from the time the court first awarded the payment.
In the case of Patricia King, a state prison employee, her 2000 judgment has gone from the $340,000 for damages and attorneys fees to $640,000.
Ms. King reported to authorities in 1999 that for 10 months, she withstood blatant sexual harassment by her boss.
An internal investigation substantiated her claims, and the warden punished the offending employee with a two-day suspension, said Melinda Bozarth, general counsel for the Texas Department of Criminal Justice.
Ms. King was dissatisfied with the disciplinary action and sued the state. In November 2000, a jury awarded her $250,000, Ms. Bozarth said.
The state appealed and lost. It has refused to pay the claim, although interest on the judgment has been accruing at a rate of 10 percent annually, compounded daily.
Because of those interest costs, Mr. Pitts is sponsoring a separate bill during the current special session to satisfy the claim, but it has yet to be considered by the full House and Senate.
"This is a difficult pill to swallow," said R. John Cullar, a Waco lawyer who has represented Ms. King.
He said that even though his client was vindicated, she is still being punished by the state. "It makes you question the process," he said.
He noted the state's $8.2 billion surplus and said that it is not just his client who is being frustrated, but many cities, counties and other public entities.
"It might be part of the process where the Legislature says we don't raise taxes, but the local entities might have to," Mr. Cullar said. "When I have a bill, I have to pay it."
Austin attorney Paul Matula also has a client who has won a final judgment amounting to $400,000 against the state. It has earned $22,000 in interest, which continues to accrue at $55 a day.
"It's difficult to negotiate with a party who never has to pay. It unfairly tilts the system against an employee who has been discriminated against," Mr. Matula said.
In his case, a woman was fired from the Texas Rehabilitation Commission after reporting sexual harassment by her boss.
"It's extremely frustrating for the state to say they don't have to pay," Mr. Matula said. "There is no accountability when a jury determines they've broken the law."
E-mail choppe@dallasnews.com
State owes, but it won't pay up
$13.2 million in unpaid bills frustrates creditors, lawmakers
06:55 AM CDT on Friday, May 5, 2006
By CHRISTY HOPPE / The Dallas Morning News
AUSTIN – The state has knowingly stiffed creditors and those owed large court judgments for the past four years, refusing to pay bills that legislators fully acknowledge are legitimate.
As of last month, the creditors list had reached 925 claims worth $13.2 million. And the amount is growing, as more claims come in and court judgments gather interest.
"We have chosen not to pay," Rep. Jim Pitts, who leads the House's budget-writing committee, said Thursday.
One of the creditors is the city of Bryan, owed $273,000 for utility work it provided for the state in 1999.
"We could always utilize that kind of money," said city finance director Kathy Davidson. "Anybody else, we would have cut off. They would be in the dark, literally."
But to a large extent, the state is immune.
Up until 2001, the Legislature routinely created a catchall spending measure, called the miscellaneous claims bill. Claims deemed legitimate that were more than $25,000 or more than four years old – sometimes the amounts owed were lost receipts or discovered belatedly through audits – were listed in the bill.
In addition, any final court judgments against the state that exceeded $250,000, usually involving discrimination or harassment suits filed by state employees, had to be approved specifically by the Legislature through the claims bill.
"We haven't had the miscellaneous claims bill go anywhere in the past two sessions," said Mr. Pitts, a Waxahachie Republican. "It was one of those things. The priority has been to balance our budget. Then it was education. So it hasn't been one of our high priorities."
Even now, with a budget surplus of more than $8 billion, the bills will probably remain unpaid.
Mr. Pitts said the Legislature is merely exercising its discretion. But he intends to create a special Appropriations Committee subcommittee during next year's regular session to examine the miscellaneous claims – likely by then to exceed 1,000 – and recommend action.
Other members of his panel expressed aggravation that so many claims have been left outstanding for so long.
"This is a terrible example," said Rep. Ruth Jones McClendon, D-San Antonio.
Rep. Glenn Hegar, R-Katy, agreed.
"I'm amazed we have [so many claims] and we don't pay people. I just can't believe that," he said. "If we lost, we lost. We owe somebody money."
The two pending court judgments that the state has refused to pay are costing more all the time, because interest accumulates on any judgment that goes unpaid from the time the court first awarded the payment.
In the case of Patricia King, a state prison employee, her 2000 judgment has gone from the $340,000 for damages and attorneys fees to $640,000.
Ms. King reported to authorities in 1999 that for 10 months, she withstood blatant sexual harassment by her boss.
An internal investigation substantiated her claims, and the warden punished the offending employee with a two-day suspension, said Melinda Bozarth, general counsel for the Texas Department of Criminal Justice.
Ms. King was dissatisfied with the disciplinary action and sued the state. In November 2000, a jury awarded her $250,000, Ms. Bozarth said.
The state appealed and lost. It has refused to pay the claim, although interest on the judgment has been accruing at a rate of 10 percent annually, compounded daily.
Because of those interest costs, Mr. Pitts is sponsoring a separate bill during the current special session to satisfy the claim, but it has yet to be considered by the full House and Senate.
"This is a difficult pill to swallow," said R. John Cullar, a Waco lawyer who has represented Ms. King.
He said that even though his client was vindicated, she is still being punished by the state. "It makes you question the process," he said.
He noted the state's $8.2 billion surplus and said that it is not just his client who is being frustrated, but many cities, counties and other public entities.
"It might be part of the process where the Legislature says we don't raise taxes, but the local entities might have to," Mr. Cullar said. "When I have a bill, I have to pay it."
Austin attorney Paul Matula also has a client who has won a final judgment amounting to $400,000 against the state. It has earned $22,000 in interest, which continues to accrue at $55 a day.
"It's difficult to negotiate with a party who never has to pay. It unfairly tilts the system against an employee who has been discriminated against," Mr. Matula said.
In his case, a woman was fired from the Texas Rehabilitation Commission after reporting sexual harassment by her boss.
"It's extremely frustrating for the state to say they don't have to pay," Mr. Matula said. "There is no accountability when a jury determines they've broken the law."
E-mail choppe@dallasnews.com