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About The Battalion. (College Station, Tex.) 1893-current | View Entire Issue (Feb. 27, 1986)
^ 1 •5* I Aquino's new government releases 33 political prisoners — Page 6 Fontenot declared innocent in killing of high school coach — Page 5 A&M uses second half rally to fend off Rice in Houston — Page 7 83 No. 107 USPS 075360 10 pages College Station, Texas Thursday, February 27, 1986 Retailer suing System comptroller attox: Insurance too costly By SCOTT SUTHERLAND Assistant City Editor upnsj■Attorney General Jim Mattox bid Wednesday that insurance I50C fCompanies have sold the public a on Ml of goods by insinuating the in- s -Sto Idustry is experiencing financial e-poffi Midship because of high jury , awards. bgie-icMHe said the companies have tlatiosinspired to drive rates up and isetheM-ce consumers to pay inflated entrylprnniums. He likened the con- rt gralspi! !( ' to the OPEC cartel that ,n 4t^ffiTtve oil prices up in the 70’s. leandsB'The OPEC situation may be ags ira nothing compared to the effects :''oluox of the collusive efforts of big in cased surance companies,” Mattox said. Ifundfi: BMattox said municipalities iedcta around Texas have discovered i the' their rates going through the afo! [roof, while insurance company in ab Earnings are soaring. He cited a Ismail community outside Austin Texadlaspn example. inspect:Hde said the community, West .Thedlahe Hills, has had only one olatio: paim against it and has only 12 doorrjemployees, yet 22 companies aintv; have refused to cover them. Mat- becaiKjtoi said 5 years ago the town paid lefkxwlEOO for insurance but today two-p would have to pay over $ 12,000. oper-Bfut when asked whether he sher had any direct evidence to sup- iveonefjpoti his claim of collusion, Mat te f( tox said he did not. a cooktiBWe have found a lot of smoke, : singHbug no fire,” he said. esealinfBde added that he has people leededii 1 inside the industry who are seek- washind'ing information to help him umpsw*'prove his suspicions. And he said the industry’s lobby for a ceiling on jury awards for certain dam- , ages is a smoke screen. Bin the past few months insur- ame companies have complained the court's exorbitant rewards have driven them into financial dship. But Mattox refuted the claim, if thttiii saling only a small percentage of , u;> claims ever reach the trial stage. sapling ■ trainiii hce alotj 1 1 ersity-a :ethe«1 it of spa 1 See related stories, page 3 $1.35 million in domoges sought Photo by DEAN SAITO Visitors at the Texas A&M Micro Center in the Memorial Stu dent Center look into different types of computers. By SCOTT SUTHERLAND Assistant City Editor A local computer retailer has filed a $1.35 million, class action lawsuit against the Texas A&M University System comptroller seeking to shut down the Micro Center, A&M’s low- cost computer outlet. KLS Computers, 701 University Dr., filed the suit January 29 against System Vice Chancellor and Comp troller Bill Wasson and other indi viduals acting under his authority. The petition to sue accuses Was son of promoting unfair trade prac tices by allowing the center to sell computers at uncompetitively low prices. KLS is seeking $1.35 million in damages from Wasson and an in junction that will close the doors on the Micro Center. KLS’s petition says the center uses public funds, public employees and public credit and hasn’t reimbursed the public treasury for those funds. Those practices are destroying com petition with local computer retail ers, the petition says. , . The petition adds that with such low, state-funded overhead the cen ter is able to sell computers at prices so low that other retailers cannot compete. These low prices and low overhead allow the center to capture 90% of the local market, according to the petition. The center operates under the agreement that customers must be either faculty, staff or a student in the System. But the petition argues that the center doesn’t police sales to make sure that only faculty, staff and students buy computers there. The center has already bank rupted one local retailer and has de stroyed the market for retailers that remain in business, the petition says. The petition alleges that the cen ter’s employees encourage custom ers to shop at other stores and then buy computers at the center. Through such tactics the center has been able to maintain a lower payroll than other businesses could nor mally operate with, the petition says. The $1.35 million is a KLS attor ney’s computed figure for all sales made by tne center since it opened. The petition says the center sold 450 computers at $1500 each for a total of $675,000. But the petition also contends that the center sold an equal amount of software, making the combined total $1.35 million. The petition reejuests that the $1.35 million be divided among the members of the class action suit. And the petition asks that Wasson pay all attorney’s fees. Surprisingly, the petition asks that KLS be represented by the Attorney General.The Attorney General also represents A&M in certain legal bouts. “It is the Attorney General’s func tion to protect the general business public, of which the class is a mem ber,” the petition stated. The petition says System attor- See Suit, page 10 Vendors: Computer sales ruined By MIKE SULLIVAN Reporter Some local computer store opera tors claim the Texas A&M Micro Center, which sells computers to stu dents at discounts, has destroyed the computer market in Brazos County. Judy Wright, president of Yes Computers, says she’s lost between one-third and one-half of her busi ness since the Micro Center opened last March. “Since the Micro Center opened, 1 have sold five Macintosh compu ters,” Wright says. The Apple Macintosh is a popular personal computer which Wright says used to account for 50 percent of her sales. Wright says because the Micro Center buys from Apple Computer in volume, it’s able to sell computers at retail for less than her dealer cost. Kathleen Dixon, manager of pub lic relations for education and con sumer markets for Apple Comput ers, says the relationship between A&M and the local computer dealers is left up to A&M. Dixon says there are only 225 uni versities, including A&M, that have the authority to decide what the uni versity/dealer relationship will be. She says Apple encourages these universities to work with the local dealers, and even requires the re maining 3,000 universities to work through their local dealers. The Micro Center restricts sales to students, faculty, and staff members, but Wright questions whether the University can enforce that regula tion. About 50 percent of the people in Brazos county are affiliated with the University in some way, she says. Larry Berry, president of KLS Computers, says the best market, the University population, has been cap tured by the Micro Center. He says the remaining market isn’t interested in buying computers. Wright says she asked the com puter manufacturers to offer dis counts to University affiliates through the local computer stores, but she says they told her the local outlets wouldn’t be able to handle the volume. Yes Computers does have an agreement with the Micro Center al lowing them to sell the Apple II at the same price as the center, but Ke vin Cureton, Yes’ service technician, says the Apple II isn’t even remotely as popular as the Macintosh. Wright says the Micro Center has an exclusive contract to sell the Ma cintosh at prices the vendors can’t touch. According to the center’s price list, the Macintosh sells for $2,100- 2,500, depending on the package. John Kane, manager of the Micro See Vendors, page 10 A&M Micro Center seeks to help students, faculty By DAVID CARTER Reporter Although local computer re tailers complain that the Texas A&M Micro Center is putting them out of business, the center’s manager says its only purpose is to offer computers at discount prices to students, faculty and staff of the Texas A&M Univer sity System. In 1984 the micro computer subcommittee, comprised of A&M officials, decided that the University’s best interests would be served by a discount computer center on campus. John Kane, manager of the computer center, says, “The sub committee identified the need to bring microcomputers to campus, both into the offices and onto the desks of the faculty, staff and stu dents.” The subcommittee considered selling computers at a discount through local vendors, Kane says, but felt those discounts wouldn’t have been as significant as those offered at the center. The subcommittee also felt al lowing local vendors to sell com puters would lessen the Universi ty’s control over the quality of computer training and support and the location of training cen ters. The second option considered by the subcommittee, the one they eventually chose, was to es tablish a center on campus that See Center, page 10 leagan pleas for $320 billion defense budget Associated Press WASHINGTON — President Reagan li'iclared Wednesday that it would be $desSi dangerous and wrong” for Con- to reduce his $320 billion military get request, saying cuts “could fatally ^promise our negotiating position” with he Soviets. Military spending cuts would be balksliding of the most irresponsible he said in a nationally broadcast jch. Democrats, in reaction, were crit- nd even Republicans said the budget askure to be reduced. Trying to reverse dwindling public and congressional support lor his 5-year-old defense buildup, Reagan argued that “American power is the indispensable el ement in a peaceful world.” Congress already has “undercut our ne gotiators” at the Geneva arms talks by ban ning tests of anti-satellite weapons and uni laterally giving the Soviets “a concession they could not win at the bargaining table,” the president said. In a bluntly worded address prepared for national broadcast from the Oval Of fice, Reagan said to cut defense now is “not cheap (and) it’s not safe.” “Just as we are sitting down at the bar gaining table with the Soviet Union, let’s not throw America’s trump card away,” Reagan said. In a brief reference to the ousting of Philippine President Ferdinand Marcos and his replacement by Corazon Aquino — his first public statement on the switch — Reagan applauded the “remarkable re straint shown by both sides to prevent bloodshed during these last tense days. “Our hearts and hands are with Presi dent Aquino and her new government as they set out to meet the challenges ahead,” he said. “Today, the Filipino people cele brate the triumph of democracy, and the world celebrates with them.” House Democratic leader Jim Wright, giving his party’s response to Reagan’s ad dress, said the president’s defense budget must be cut to protect the nation from an other danger— huge deficits. “We think the deficits themselves pose a danger to our national security,” Wright said in remarks prepared for broadcast af ter the president’s speech. Wright said if Congress approves the 11.9 percent boost in authorized military spending that Reagan seeks for the fiscal year beginning Oct. 1, “we’d be spending almost four times as much on the military by the end of this decade as the nation spent during the height of the Vietnam War.” Wright criticized “glaring waste,” such as $400 hammers and $7,600 coffee pots, and said “even the Pentagon should be held to strict standards of accountability in spend ing, taxpayers’ money.” Reagan, defending his administration against charges of wasteful and sometimes fraudulent defense spending, said Defense Secretary Caspar W. Weinberger “should be praised, not pilloried, for cleaning the skeletons out of the closet.” Bullock says shortfall of $6.1 billion possible By JERRY OSLIN City Editor [State Comptroller Bob Bullock said Wednesday that Texas will be facing a $6.1 billion shortfall if the state Legislature allows the |fis(,tl 1988-89 budgets to increase atihe present biennium’s rate. ■ Bullock, in College Station to address a state conference of bounty judges and commission ers, said the 8 percent increase al lowed for fiscal 1986 and 1987 al ready has caused a projected $1.3 billion shortfall. ‘Even if they (the Legislature) enact a bare bones budget, and I dedi; mean a bare bones budget (for leal 1988-89), they will still be $2.1 billion short,” he said. Bullock said Texas’ financial crisis is not only due to the recent slide in crude oil prices but is also the result of a surge in the state’s population. “Spending patterns do track population,” he said. “More peo ple mean more kids, more class rooms, more schools. About 50 percent of all money spent by the Legislature goes to education.” Increased population means more needed funds for educa tion, highways, social services, the Department of Public Safety and the Texas Department of Correc tions, Bullock said. He said the five categories account for about 90 percent of the state’s spend ing. Breaks available for working parents Tax deductible expenses listed By JIM LUTHER AP Tax Writer Editor’s note — This is the fourth in a series of five articles written to help taxpayers prepare their 1985 income tax returns. This installment covers expenses you may deduct. WASHINGTON — Parents who must pay for child-care services in order to hold a job may qualify for a tax cut of up to $1,440 from the fed eral government. The tax benefit is available to a person who pays someone to care for a dependent child w ho is under 15 or is disabled (or a disabled spouse) so the taxpayer can work or seek work. The credit — which off sets taxes owed dollar for dollar — may be claimed by filing either Form 1040 plus Form 2441, or Form 1040A and Schedule 1. Expenses eligible for the credit in clude household services, such as provided by a cook or maid if at least part of the service is for the depen dent. Costs of feeding or educating a child generally are not eligible. How ever, if a day-care center provides lunch and some education as part of its child-care program, the full cost may be eligible. You may not hire your own child under 19 to babysit and claim the credit, but you may pay your mother, for example, even if she lives with you, so long as she is not your dependent. Expenses of up to $2,400 are eligi ble if you are paying for the care of one person, or up to $4,800 if for two or more. But the qualified ex penses also may not exceed your earned income for the year —wages, tips, commissions and the like, but not interest or unemployment com pensation. The credit is also limited by your total adjusted gross income. The full credit of 30 percent of eligible ex penses goes only to those with in comes of $10,000 or less. It declines gradually as income increases — the credit is 20 percent for those with in comes over $28,000. Medical expenses that are not re imbursed by insurance or some other third party may provide a sub stantial tax reduction. But only the portion of expenses exceeding 5 percent of adjusted gross income may be deducted. You must file the long Form 1040 to itemize those de ductions. When you are totaling unreim bursed expenses, keep in mind you may count costs of transportation in connection with health care. That is See Some income, page 10