Attorney General Darrell McGraw

CHARLESTON -- Attorney General Darrell McGraw's office says changes to the state workers' compensation system mean it needs more money to operate.

In a presentation made Thursday to the House Finance Committee by Chief Deputy Attorney General Fran Hughes, the office seeks two improvement packages for its 2007 budget.

The first is for personal services related to the state Workers' Compensation Division becoming the private BrickStreet Mutual Insurance Co. on Jan. 1. Before, Workers' Comp paid the AG's office direct costs and a 19 percent overhead for legal work. That totaled about $723,000 annually.

Now that it is privatized, BrickStreet refuses to pay that much. BrickStreet makes an annual $240,000 payment to work on old claims. The AG's office asks the Legislature to restore that $483,123 deficit to its budget.

Also, the AG's office says it has seen its receivables collection time expand over the past two years.

"The number of days that we carry receivables has doubled due to budget cuts of other agencies," the presentation report states. "We expect that the other agencies will eventually reimburse our office for services; however, the trend indicates that this collection time is increasing, and this slow rate of paying significantly impacts our ability to effectively manage our office.

"We are in a position of having to make collection calls for receivables almost every pay period in order to meet payroll. This is particularly disturbing since the Auditor's office personnel has represented to us that if one State agency fails to make payroll, no State agencies will receive payroll checks. …

"We do not want to be known as the Attorney General's office that dropped civil rights, opened the doors at Mt. Olive (Penitentiary), or brought lawsuits to fund its operations."

The AG's office also requests another $350,000 to cover ongoing expenses such as operations, legal research and support via West Law.

Part of that request includes an upgrade to the AG's Client Services Division office space on Quarrier Street in Charleston. The Class D office space, the report says, costs $5.25 per square foot.

"This office space presents a particularly poor representation to the State's citizens and small businesses who seek our services in person," the report states. "It is a detriment to employee morale and productivity. These upgrades would also make the office more functional."

The report also says that without an increase in rent, it would be difficult for any landlord to afford upgrades to the space. Additional revenues for rent would assist in negotiating space upgrades that would result in a Class C or C+ space.

"The Attorney General's office is actually working with less real dollars than it had in 1996," the presentation report states. "Although it is true that our funding appropriation is higher than 1996, after adjusting for inflation, we have less actual dollars on which to operate than we did in 1996. The situation worsens after calculating the loss of the operating revenue from the Workers' Compensation Division."

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