Louisiana Prepares to Push Delinquencies to New Recovery Office

Louisiana officials announced plans this week to give the state's new debt recovery office its first delinquent accounts for collection.

State Treasurer John Kennedy has a list of 36 nonprofits that received $4.5 million in tax money from lawmakers but haven't complied with state financial reporting requirements. If the nonprofits don't file the documents, essentially quarterly progress reports about the use of the state money, he said he's going to refer them to the new Office of Debt Recovery, seeking to get the money repaid.

The treasurer's office said the non-government organizations, or NGOs, have until the end of August to comply with the reporting or face collection efforts.

Lawmakers set up the Office of Debt Recovery in the last legislative session, as a way to drum up more money for the state treasury after years of repeated budget shortfalls. It's unclear how long it will take for the nonprofits to face collection efforts. The state's Department of Revenue, which oversees the debt recovery office, is still working to get the agency up and running in coordination with collection efforts at the attorney general's office.

On the treasurer's list of nonprofits receiving tax money are organizations such as the Treme Community Education Program in New Orleans, which received $325,000; the Wilbert Tross Sr. Community Development And Counseling Center in Gretna, La., which received $350,000; the Rapides Primary Health Care Center in Alexandria, La., which received $550,000; and the Purple Circle Social Club in Baton Rouge, La., which received $50,000 from lawmakers.

Revenue department spokesman Doug Baker said he's hopeful the Office of Debt Recovery will be operating by the end of 2013, with back-owed debts being collected before the fiscal year ends next June 30. Revenue Secretary Tim Barfield and Attorney General Buddy Caldwell sent a letter to agency leaders earlier this month, notifying them of the bolstered collection plans and the information that will be needed from each agency about outstanding debts.

The Office of Debt Recovery will have the authority to revoke and suspend state-issued licenses and offset tax refunds or other state accounts payable until a debt is paid. Under the law, the office can start accepting delinquent accounts for collection on Aug. 17. Estimates are the efforts could generate up to $200 million over five years, with as much as $30 million brought in this year.