La. leaders weighing debt-collection ideas
BATON ROUGE, La. (AP) — State officials weighing options for how to better collect money owed to the state heard Wednesday from the leaders of companies that run debt-collection services and that auction delinquent accounts to investors for upfront cash.
No decisions were made about what, if anything, state leaders will do to beef up debt-collection efforts. But members of the Cash Management Review Board said they will continue to research ideas.
"Louisiana's not doing a very good job collecting the money that's owed to its taxpayers," Treasurer John Kennedy said.
The state has no centralized collection agency to handle all state government debts. In the most recent tally, more than $1.4 billion was owed to the state in past due accounts.
Lawmakers and Kennedy are pushing for changes to the state's debt-collection efforts, to drum up more cash for the state, which has faced continued budget shortfalls in recent years.
"What we're trying to determine is, can we get a better return than what we're doing right now?" said Rep. Chris Broadwater, R-Hammond.
Broadwater sponsored a bill, passed earlier this year, that authorized the creation of a two-year pilot program that would let the state sell or auction off a certain slice of long-term delinquent accounts for upfront cash to companies that believe they can collect some of the money owed.
Nic Perkin, co-founder and president of The Receivables Exchange, said investors are looking for assets to buy and the state likely could find a wide array of people interested in purchasing some of its back-owed debts.
"You probably couldn't have picked a better time than now to look at doing a program like this," he told the cash management panel. "There'd be a tremendous amount of appetite, in my opinion, of what you're contemplating here."
Perkin's company functions as an online intermediary that links buyers of delinquent accounts with the sellers. His firm has no experience with state government trying to sell its debts.
Any debt sale would need approval from Gov. Bobby Jindal's administration before it could be used. Administration leaders have said they are reviewing debt-collection programs in other states before making recommendations.
Tom Brenan, president of Coface North America, Inc., which does debt collection work, recommended that the state standardize its collection efforts and either boost its in-house experts or hire an outside firm.
"These receivables are not like fine wine. They're not getting better as they're getting older," he said.