Last Modified: Monday, July 23, 2012 5:31 PM
Necessity is the motherhood of invention.
That old saying applies to Louisiana’s budgetary crisis. With Louisiana facing a $859 million hole in its Medicaid funding and reasonable voices predicting a new series of mid-year budget cuts, state lawmakers have developed a new interest in revenue streams.
With the Jindal administration stubbornly clinging to its no-new-taxes philosophy, legislators are looking elsewhere for money.
Yesterday, a 14-person committee began looking at tax exemptions that the state has doled out over the years with a primary focus on which exemptions may be costing the state more money that they are bringing in.
Another area of new concern is how the state can collect money that it is owed.
House Bill 741 by state Rep. Chris Broadwater, R-Hammond, established a pilot program to sell, securitize or auction portions of the state’s long-term debt.
More than $1.3 billion is estimated to be owed the state, with more than half of that figure more than 180 days past due.
The governor’s Division of Administration recently told state lawmakers that $55 million would likely be written off because it was either uncollectable or three years past due.
Assistant Attorney General Richard McGimsey said other than debts owed to the state Department of Revenue, there is no requirement in Louisiana for delinquent payments to be forwarded to the state Attorney General’s Office.
In 2009, as a member of the Commission on Streamlining Government State Treasurer, John Kennedy proposed making the Cash Management Review Board responsible for collecting all money all the state, thus centralizing those efforts. Kennedy recommended The Review Board would be mandated to file a quarterly report on the amount of outstanding receivables.
“The time is past due that we establish an action plan to collect this money owed to the state instead of letting it wither on the vine,” Kennedy said following passage of Broadwater’s bill. “In tight budget times like these, taxpayers expect us to exhaust every option to bring in every dollar owed to the state.”
HB 741 also calls for 25 percent of the state debt to be sold to private companies. That should only be seen, as an option of last resort since many of those deals would result in a pennies-on-the-dollar return for the state.
It’s good that the state is considering taking an aggressive approach to addressing the money it’s owed. It’s a shame, though, that it comes three years after Kennedy first suggested it.
Had state lawmakers and the Jindal Administration listened to Kennedy in 2009, the state might not be in quite the financial bind it finds itself in.
This editorial was written by a member of the American Press Editorial Board. Its content reflects the collaborative opinion of the Board, whose members include Bobby Dower, Ken Stickney, Jim Beam, Dennis Spears, Crystal Stevenson and Donna Price.
Posted By: Dwight On: 7/24/2012
Title: More predators
"HB 741 also calls for 25 percent of the state debt to be sold to private companies" Just what the state needs more predators. The state needs to do its own collecting.