The Jindal administration vowed Friday to step up efforts to collect more than $1 billion owed to state government for environmental quality monitoring, income taxes, college tuition and other expenses.
Commissioner of Administration Paul Rainwater, the governor’s chief budget aide, outlined a three-point plan that calls for creating more robust collection efforts, setting firm payment deadlines and punishing debtors.
To put teeth into the efforts, Rainwater said the state needs to consider withholding tax refunds and establishing late penalties.
“Any revenue that’s out there, we want to capture,” he told the Cash Management Review Board during a meeting at the State Capitol.
As part of the new approach, the Jindal administration advertised for “private-sector expertise” in collecting and analyzing what is owed by college students, private insurance companies and others.
Amid state government struggling to scrape together dollars for public services, the Cash Management Review Board is tackling the issue of money owed to the state. In accounting terms, the unpaid bills are known as receivables.
The receivables range from college tuition installment payments to medical charges. Totaled, they added up to more than $1 billion on March 31.
Initially, different ideas emerged to deal with the problem.
State Rep. Chris Broadwater, R-Hammond, 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.
State Treasurer John Kennedy pushed to build a centralized debt collection agency within state government.
The Jindal administration produced its own plan Friday and promised to consider selling a portion of the state’s debt at a discount in order to generate cash.
By selling the debt, collecting it would become someone else’s problem.
“This is fantastic,” Broadwater said after listening to Rainwater’s presentation. “It’s comprehensive. It’s strategic.”
Rainwater said he wants to select a consultant in October and then spend six months developing policies to streamline collections, set up payment schedules and establish new penalties and fines.
One problem, Rainwater said, is that state agencies’ accountants operate by different rules when it comes to demanding payment. Early action needs to be taken on delinquent payments instead of waiting until they are 180 days past due, he said. Timelines need to be set for debts to be forwarded to collection agents, he said.
“Our accountants ... don’t have the expertise that’s needed to collect some of these debts,” Rainwater said.
The penalties under consideration include withholding tax refunds and state work contracts from people and companies who owe the state money.
Rainwater said state government needs to make paying debt easier by embracing electronic payment methods.
Debts that reach “adolescence” need to be tackled either by full-time collection agents within state government or by a private company hired by the state, Rainwater said.
Kennedy said the problem of collecting receivables predates Gov. Bobby Jindal, who took office in 2008.
“As long as I can remember we’ve carried between $1 billion and $1.6 billion in receivables. If we can just improve that a fraction, that’s substantial money,” Kennedy said.
Rainwater said the problem will be resolved over time instead of at once.
He said a budget deficit is not resolved overnight.
“We’re working together,” Kennedy told him. “This is kind of like ‘The Love Boat.’ ”