Louisiana's efforts to create a central collections office to pursue more than $1 billion in debts owed to the state government could take several years to complete, officials said.
Tim Barfield, the state's revenue secretary, said that timeline actually is on track with how other states rolled out similar efforts. The work to build an integrated and automated debt collection system across 200 state agencies is incredibly detailed, he said.
Lawmakers established the Office of Debt Recovery last year, seeking to generate new money for the state treasury by bolstering efforts to collect back-owed debts. The debts total an estimated $1.4 billion and are said to range from delinquent college tuition installments to environmental monitoring fees.
The office has the authority to revoke licenses, seize bank accounts and take tax refunds. State agencies will be required to refer all their delinquent accounts to either the attorney general's office or the debt recovery office for collection.
The office will handle debts considered final with no further right of appeal, and agencies will have to refer the accounts quickly, once they are 60 days old.
The recovery office won't handle collection efforts for agencies that have agreements for the attorney general's office to do the work. It also won't handle debts owed to federal social services programs or back-owed unemployment compensation, which falls under another collection process.
State Treasurer John Kennedy and Rep. Chris Broadwater, sponsor of the legislation creating the debt recovery office, commended the work being done to get the office started. Kennedy said he is particularly pleased with the participation rate from banks, which are not obligated to work with the state's collection office program.
Fifty-six percent of banks in the state - 205 out of 365 banks - have specifically agreed to participate in a system that will let the state seize money from accounts to address back-owed debts, Barfield said.
The state's revenue department is working with agencies to develop individual collection agreements and to assess the types of delinquent accounts they have. Barfield is focused first on the top six departments that oversee more than 90 percent of the back-owed debts, including the health, public safety and corrections departments.