Director Reggie James of CU's Southwest Regional Office

What the governor isn't telling us (June 2003).

by Reggie James

Are you better off today as a consumer than you were on January 14? That, you may recall, was the day our legislature began one of its more fractious sessions in recent memory.

In 1999 and 2001, many of us gave the Legislature's efforts on consumer initiatives mixed reviews. Consumers gained ground in some areas but took significant steps back in others. In educational parlance, the legislature's pro-consumer efforts rated between a "C" and a "C+."

We can't be as benevolent in 2003. It was, to borrow the word from a recent editorial — ugly. Generally, the legislative session saw the triumph of raw economic and political power to the exclusion of logic and good public policy. The legislature's efforts this year merit no better than a 'D' in advancing the consumer interest.

The biggest winners? The insurance industry lobby, by a landslide. After declaring homeowners insurance one of the session's two emergency items, lawmakers retreated with nothing of substance for consumers, short of PR talk. The truth of the matter is you and I will not see our rates rolled back to reasonable levels, insurance companies will still be able to unfairly use credit scores against us, and insurers will have an easy time asking for and receiving further rate increases.

Med mal mishandled from the start

The other emergency item — medical malpractice — was mishandled from the start. The legislative leadership used the medical malpractice bill as a Trojan horse to carry other tort reform measures that lacked public support. You and I are the losers here because we will have a much tougher time keeping the manufacturers of defective products and dangerous drugs accountable. The legislature imposed caps on the non economic damages we can recover against doctors, hospitals and other health care providers despite strong evidence showing such damages have a negligible affect on rising malpractice insurance rates for docs. The caps serve to boost insurance company profits and insulate bad actors who hurt people, while unjustly limiting damages for those with minimal economic losses — the elderly, children and homemakers. The legislature did nothing to regulate the cost of malpractice insurance, nor will its initiatives actually curb malpractice.

If you're like the 60 percent of Texans who get health care coverage for themselves and their families through their employers, life just got a little tougher for you. Key benefits that took the legislature more than two decades to require for employer-provided health care plans have been wiped out. Among these are coverage for contraceptives and chemical dependency treatment.

When it comes to money, the legislature had its hands in your pocketbook, too. Along with higher fines for traffic tickets and deregulated university tuition, lawmakers gave big loan companies another way to increase your debt. HB 1380 allows finance companies to add a range of low-value, high cost products (like club memberships, security plans, etc) to loans -- typically several thousand-dollar loans made at interest rates that can top 30 percent. We are asking Gov. Rick Perry for a veto.

Similarly, another bill allows the sale of rent-to-own "loss damage waivers" for businesses that rent items like furniture and appliances. These waivers resemble insurance, but are not regulated as such. At a cost of 10 percent of the amount of the rental, these add-ons will increase the cost of basic household goods for families who can least afford them.

Fees replace taxes

The Governor and legislative leadership made a big deal about balancing the budget with no new taxes, the consequences of which impose severe hardships on the less fortunate in need of critical state services. The "no new taxes" pledge also distracted consumers from the fact that the legislature held consumer purses and wallets open to a host of new business and government fees and charges.

If you own a manufactured home, look out. SB 521 widened the ability of retailers to sell consumers manufactured homes on high-cost personal loans. The legislature in 2001 had severely restricted their use after widespread problems led to many consumers losing their homes to repossession. A senate amendment to address some of the problems with the repossession process was not passed.

If you want to participate in the decisions of your public officials, new legislation closing meetings and records will make it more difficult. One bill closes meetings of county commissioners when they discuss "business and financial issues" related to contracts. Another eliminated the requirement that pipeline companies tell parents at an annual school board meeting about the dangers posed by nearby pipelines and the company's emergency response plans.

The "mixed bag" award of the session goes to a bill that creates a time consuming, confusing and expensive administrative inspection process for consumers complaining of a home defect. The bill is laced with procedural technicalities that may trip up unwary homeowners; but does contain a few provisions that offer genuine benefits to homeowners. In the final bill, the builders failed to eliminate the "warranty of habitability" which guarantees that a home is fit to live in and free of safety or sanitary problems regardless of whether it meets all other construction standards. Another beneficial provision would allow consumers to challenge an arbitration award if the arbitrator showed a manifest disregard for state law.

That is not to say that there weren't outright bright spots along the way, however few. The passage of SB 473 provides an important response to the problem of identity theft in Texas. It puts in place key changes that will help limit identity theft as well as provide relief to victims. Despite broad bipartisan support, efforts are underway to torpedo this bill and we're calling on the governor to sign it immediately.

Patients' advocacy office is born

Also, a newly created office of patient protection will represent the interests of consumers before boards regulating health care professionals, including the Texas Board of Medical Examiners. The office will represent the interests of consumers before these boards and will act as a liaison to patient complainants.

In the utility arena, there were at least five bills filed to strengthen customer protection provisions in the law. None of them passed. Also of note was a bill not acted on that would've prevented any state regulations on broadband service providers.

Consumer groups also pushed back an attempt to defer a review of the state's new deregulated electric market beyond 2005. Consumers also kept local phone companies from passing to us a tax they are required to pay to maintain an infrastructure fund designed to fund the technology allotment in our schools and other public places.

Generally, however, consumers lost a lot of ground. So don't buy for a minute the governor's recent assertion that the legislature's accomplishments this year were nothing short of epic. Perhaps he meant tragic. Let's hope he understands the difference.

Reggie James is director of the Southwest Regional Office of Consumers Union, publisher of Consumer Reports. This piece is the longer, more comprehensive version of an op ed submitted to Texas newspapers.