Iowa taxpayers will have to pay mounting interest charges on unpaid legal bills due to a statehouse stand-off over legislation that includes stop-gap state spending and a new tax-related proposal. For weeks the State of Iowa hasn’t been paying lawyers who’re representing indigent clients in court. If legislators don’t come to some agreement soon, Mark Smith at the state Public Defender’s office says Iowa taxpayers will be charged interest.
“If something happens on this bill this week and we’re able to start paying bills, we have about $40,000 in claims that may be entitled to some interest,” Smith says. “If it were to go to the end of next week, there is about $400,000 worth of claims that we may owe interest on.”
The interest rate on those unpaid bills is one percent and the interest that would be charged this Friday amounts to about $4000.
Lawyers have been calling and emailing legislators, complaining about the situation. Representative Kurt Swain, a Democrat from Bloomfield, says small law offices across the state are being unfairly pinched.
“One call I had from a lawyer that he was just getting ready to have a conference with his secretary to send her home because he couldn’t afford to pay her any longer,” Swain says. “He felt an obligation to pay his bills, but the State of Iowa had not felt the obligation to send him the check for the $8000 that the state owed him.”
It’s bipartisan anger from both Republicans and Democrats who are attorneys — and who are being unpaid. They’re venting that anger at legislators like Representative Steve Lukan, a Republican from New Vienna.
“There’s absolutely reason for concern if you’re working in this field,” Lukan says. “I certainly feel their frustration.”
Lukan says he hopes the situation can be resolved yet this week. The hold-up has been over a bill that includes $18 million for the state’s indigent defense program as well as a new “taxpayers relief fund” that Republicans have proposed. Democrats in the Senate have passed another bill which would provide all the payments to the lawyers, but Republicans in the House have refused to consider it. Republicans, in turn, blame Democrats for the situation, saying Democrats who crafted last year’s state budget intentionally failed to set aside enough money for the state’s indigent defense program.
Governor Branstad, a Republican, said last week he wanted legislators to resolve their dispute quickly and get the legal bills paid.