Saturday, August 23, 2008

A State Without a Budget: Day 54½ - AMERICAN EXPRESS COULD SUSPEND AmEx CARD SERVICE TO STATE EMPLOYEES IF BUDGET DELAY DRAGS IN - The online division of The Sacramento Bee

This story is taken from Sacbee / Politics.

By Andrew McIntosh - Sacramento Bee

12:39 pm PDT Friday, August 22, 2008 - With California's budget impasse approaching its 54th day, financial services giant American Express Co. has warned the state that its workers may have to leave home without their state AmEx travel card if the dispute drags on too long.

"American Express will not suspend state billing accounts at the normal past due interval; however, we reserve the right to suspend service should the impasse become protracted," Doug Browne, an American Express government services manager, told government travel coordinators in a June 12 memo.

Brown declined to discuss his memo, which was obtained by The Bee.

AmEx spokeswoman Janet Lee said the financial services giant does not publicly discuss its corporate accounts.

California is currently not refunding its workers for any travel expenses they incur using their state credit cards, from air fare to car rentals to hotel rooms and conference room rental fees.

Eric Lamoureux, spokesman for the Department of General Services, said AmEx is carrying $10.4 million in unpaid charges on its books that were incurred by state workers and agencies since the new fiscal year began July 1.

Managers and employees have been urged to avoid business-related travel until a budget is passed, Lamoureux said.

"Some staff are choosing to absorb the costs and seek reimbursement later," he said.

Browne also wrote that AmEx would suspend and deactivate accounts and cards that included spending before the state's last fiscal year ended June 30, but which was not paid for in full before its June 25 billing cycle ended.

State workers typically charge government trips or travel expenses directly to their government AmEx cards and later request refunds from their department or agency. No refunds are available now for expenses incurred after the fiscal year began.

In his memo to state travel coordinators, Browne wrote that the conglomerate has some patience for the state's yearly budget feuds because of its long relationship with the state "and history of prompt payment following previous budget delays."

Yet his note suggests that AmEx feels there are limits.

"A budget impasse imposes American Express with a financial liability," Browne wrote, noting that his company has traditionally not charged interest or penalties on overdue state government accounts.

"During our long term partnership we have found ourselves supporting transactions that cannot be paid by the state and supporting state travelers who cannot be reimbursed for travel expenses," Browne added.

Lamoureux of DGS dismissed any suggestion that AmEx is impatient.

"AmEx is demonstrating to us that they want to work with us by agreeing to carry balances without penalty until a budget is signed," he said. "What they aren't willing to do is carry balances that are holdovers from the last fiscal year that should have been taken care of by employees already."

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