Centralized debt collection is a work in progress in La.
BATON ROUGE (AP) — Lawmakers looking to boost dollars for state expenses are trying to reach a compromise to centralize and toughen debt collection efforts, with estimates that the move could drum up $200 million over five years for the state treasury.
The Senate Finance Committee on Monday stalled a debt collection proposal by Rep. Chris Broadwater, R-Hammond, trying to address concerns about administrative costs and the flow of money that would be gathered.
But senators said they want to find a way to intensify collection efforts and bump up dollars in a state grappling with its sixth year of budget troubles.
“It’s a lot of money, and I really wish we could collect it. It would solve a lot of our problems,” said Sen. Mack “Bodi” White, R-Central.
Broadwater has been working for a year on ways to get the state’s back-owed bills paid and generate millions of dollars owed to state agencies. He said Louisiana has been too lax in seeking payment for delinquent accounts, which reached $1.4 billion in the most recent tally.
“We have had a recurring problem in how we collect our money,” he said. “In any given quarter, we are writing off considerable amounts of money.”
He said write-offs deemed uncollectable reached as much as $200 million a year.
The state has 174 agencies — and no unified collection system to handle all state government debts. The attorney general’s office collects back-owed debt for 43 agencies that have contracts with them directly. But such contracts aren’t required.
Broadwater’s bill would create a new debt recovery office in the Department of Revenue and give it the authority to revoke and suspend state-issued licenses for back debts, among other things.
It would require agencies to refer all their delinquent accounts to either the attorney general’s office or the new debt recovery office for collection. The debts would have to be referred quickly, once they are 60 days old.
“The longer you let it sit on the books, the harder it’s going to be to collect,” Broadwater said.
Finance Committee Chairman Jack Donahue, R-Mandeville, questioned whether the creation of a new revenue department office would increase bureaucracy without certainty that the dollars spent on new staff would generate a significant increase in debt collection.
Broadwater said the legislation was modeled on successful efforts in other states. The leader of the revenue department, Tim Barfield, said the agency wouldn’t engage in a hiring spree, but would bring on more people if the debt collection cases justified new workers.
“I’m hoping he has to hire additional people to count all the money that’s coming in,” Broadwater said.
An analyst for the nonpartisan Legislative Fiscal Office also generated worries for senators when she described how the money collected from delinquent accounts would flow back to state agencies, rather than into the state’s general fund for use as determined by lawmakers.
A contractor hired by Gov. Bobby Jindal’s administration to devise a strategy for improving debt collection efforts estimated the state could bring in an extra $150 million to $200 million within five years by improving its debt collection process, using methods included in Broadwater’s bill.
The House already has given unanimous passage to the debt collection measure.
Time for a compromise is running short, however. The legislative session must end by June 6. The Finance Committee planned to work on the bill again Wednesday.