A financial firm gave state officials a list of suggestions Thursday for collecting up to $158 million in old debt.
The key, representatives with CGI said, is to create a centralized collection operation, require state agencies to forward the names of debtors and take other steps.
“Some of the people who owe the state money have terrible credit because they owe lots of people money. Some don’t have bad credit,” said Ted London, vice president of tax, revenue and collections at CGI’s Center of Excellence.
The Cash Management Review Board has been studying ways to collect the millions of dollars owed to state government.
The money owed ranges from delinquent college tuition installments to unpaid environmental monitoring fees.
Some of the money has been owed for just a few weeks. Other bills have not been paid for months or years.
The Jindal administration hired CGI to analyze portions of the more than $1.6 billion owed to state government that is at least six months past due.
With legislation filed to tackle the issue, the debt likely will be debated in the session that starts Monday.
State Reps. Chris Broadwater, R-Hammond, and Ted James, D-Baton Rouge, filed House Bill 629 to task the state Department of Revenue with collecting delinquent debt for agencies not already contracting with the state Attorney General’s Office.
Much of HB629 would implement changes suggested by CGI.
“(The bill would) put us in a position to where we are managing the hard-earned tax dollars of our citizens in a much better fashion so that we can put that revenue back into our state general fund to try to exercise good judgment and implement those dollars in the programs that make sense,” Broadwater said.
He said doing a better job of collecting debt might prevent the state from making future state budget cuts.
Broadwater successfully sponsored legislation earlier this year to establish a pilot program to sell, securitize or auction portions of the state’s long-term delinquent accounts, or receivables.
CGI tackled $1.2 billion owed to the state Department of Revenue, the state Department of Health and Hospitals, the state Department of Transportation and Development, the state Department of Insurance, the state Department of Children and Family Services and Delgado Community College.
The outstanding debts ranged from $712 million owed to DHH to $154,000 owed to the insurance department.
CGI determined that the state would collect $26 million of the total debt over the next five years by doing nothing different and $2.9 million by selling the debt for a loss.
“That’s obviously not a reasonable alternative,” state Treasurer John Kennedy said.
Using best practices, the state could collect $97 million to $158 million for all state agencies over five years, CGI said.
Besides establishing a centralized collection operation, those practices include giving the state the authority to request bank information from debtors and to refuse renewal requests on licenses, such as permits to hunt and fish.