Louisiana’s new debt collection office, only about a year old, is on track to boost repayment of delinquent accounts by $10 million this budget year, Revenue Secretary Tim Barfield says. As The Associated Press reports, the money already was assumed in the state’s budget, so it won’t offer any relief to lawmakers looking for ways to solve the state’s ongoing financial problems.
Barfield told an oversight board on Tuesday that his department’s work to piece together the centralized collection agency known as the Office of Debt Recovery was on schedule for completion by mid-2016.
“We’re seeing a lot of benefits already, just from the focus on the debt,” he told the board.
Lawmakers created the office in 2013 to bolster collection efforts in a state where overdue debts topped $1.1 billion, according to a recent report. The office, which has eight full-time employees, has the authority to revoke licenses, seize bank accounts and take tax refunds.
Although recovery efforts are enhanced with the new office, Barfield has had to manage expectations. He repeatedly has explained that many of the state’s oldest debts are uncollectable and that state officials shouldn’t expect giant sums to roll in each year.
“The expectation of everybody is this is going to be hundreds of millions of dollars a year. I think the reality is for a relatively small cost, a few million dollars a year, you’re going to get to the point where you get $20 million to $25 million a year,” Barfield said, after providing his update to the Cash Management Review Board.
Barfield’s department is working with agencies—Louisiana has more than 200 of them—to develop individual collection agreements and to assess the delinquent accounts they have. Eleven agencies have worked out participation agreements so far, Barfield says. He’s focused first on the top departments that oversee more than 90% of the back-owed debts, including the health, public safety and corrections departments. Read the full story.
