Gov. Bobby Jindal’s chief budget aide said Monday that he wants to hire a private company to advise him on the best way to collect more than $1 billion owed to state government by college students, companies and others.
“We’ll also be talking to legislators about what we’re finding and looking at legislation as well,” Commissioner of Administration Paul Rainwater said.
Called receivables, the unpaid bills totaled more than $1 billion on March 31. Some of it has only been owed a few weeks or days.
Other bills haven’t been paid for years.
The unpaid bills include medical services, college tuition installment payments, environmental quality monitoring and other expenses.
With state government struggling to pay its own bills during the economic downturn, state officials are pressing the governor to get aggressive about the debts.
Two years ago, Jindal backed legislation to establish a debt recovery program within the state Department of Revenue. The legislation died.
Other ideas since have surfaced, including selling a portion of the debt at a loss to clear it from state government’s accounting books and make collecting it someone else’s problem.
State Treasurer John Kennedy said Monday that Jindal needs to resurrect the proposal to create a centralized debt collection agency in state government.
Kennedy said he favors allowing the state Attorney General’s Office to collect the hundred of millions of dollars owed to state government.
“To me, this is low-hanging fruit. It’s a no-brainer. We really are in the Middle Ages,” he said.
However, Rainwater said Kennedy has offered different figures over the years on how much money a centralized debt collection agency would generate for state government.
Almost 90 percent of receivables considered to be uncollectable stem from health care services provided to the poor and elderly, Rainwater said,
“This will not be some silver bullet for the state budget,” he said.
The governor might resurrect the idea of a centralized debt collection agency in next year’s legislative session, Rainwater said.
He said he has no idea how much money it will cost to hire a company to give advice on the state’s options and research what other states do.
Rainwater said he will reveal more details on his proposal when the Cash Management Review Board meets Friday at the State Capitol.
The board — whose members include Kennedy, Rainwater and Legislative Auditor Daryl G. Purpera — previously heard suggestions that the state should sell the debt through online auctions or adopt an aggressive collections effort.
Some agencies collect debt on their own. Others task the state Attorney General’s Office with the job. Still, the debt continues to accumulate.
Kennedy said he has been meeting privately with Rainwater, who is the governor’s top budget advisor, on the debt problem.
“Paul has told me that they’re going to come up with a plan,” he said.
Alternatively, Kennedy said he will go to the Louisiana Legislature himself with a proposed solution if the Jindal administration fails to settle on an idea.
Kennedy offered several suggestions, including:
- Cataloguing the debt and deciding what is uncollectable by state government.
- Withholding tax refunds and vendor payments from people and businesses who owe the state money.
- Monitoring debts on a daily basis.
- Restricting businesses from getting new state contracts if they are behind on paying bills to the state.