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State Department of Revenue outlines plan for debt collection

Last Modified: Friday, October 12, 2012 4:00 PM

BATON ROUGE (AP) — Gov. Bobby Jindal's administration is hoping to boost its debt-collection efforts by intercepting payments that the federal government may owe to vendors and contractors with unpaid debts to Louisiana agencies.

Jason DeCuir, assistant secretary for the Department of Revenue, outlined the plans Friday to a panel of state officials looking for ways to improve collection of delinquent accounts that total hundreds of millions of dollars.

The department estimates it can collect $11 million more per year in back-owed debts, money that could help fill state budget gaps elsewhere. At least four other states have similar programs that intercept the federal payments, collecting $84 million since 2007.

"We've done a lot of research and modeling what those states have done, saw the potential and increase in their collections, and it's time to get Louisiana going," DeCuir told the Cash Management Review Board.

It's unclear when the program will begin.

The revenue department will be seeking a private company that can run a system to match Louisiana debtors with federal vendors and contractors, and DeCuir said some companies have said they could get such a system running within three to six months after being hired.

"This is one consulting contract I won't complain about. This is exactly what we need," said Treasurer John Kennedy, who is pushing for more aggressive debt-collection efforts by state agencies.

Under the program, state agencies will submit information on their delinquent debts, and the company running the program will match the back-owed accounts to a federal database of taxpayers, vendors and contractors who are owed money by the federal government.

If there's a match, those federal refunds or payments will be routed to the state agency to pay off the delinquent account, rather than go to the individual or company that is owed the federal cash.

Announcement of the program by the Department of Revenue comes after the Jindal administration began intensifying efforts to collect millions of dollars in debt owed to state government agencies, after complaints the state has been too lax in seeking payment.

The state has 174 agencies — and no centralized collection system to handle all state government debts. In a recent tally, more than $1.4 billion was owed to the state in past due accounts.

The administration is planning to standardize its collection policies across agencies, centralize some efforts and toughen enforcement by increasing penalties. Jindal's budget office is looking for an outside adviser to review the state's outstanding debts and help devise the new strategy.

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