Louisiana officials, reviewing options for how to better collect debts owed to the state, heard Wednesday from several collection agencies and companies that auction delinquent accounts to investors.
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. State lawmakers are pushing for changes to the state's collection efforts after facing continued budget shortfalls in recent years.
State leaders have not decided if any new plans will be implemented but members of the state's Cash Management Review Board will continue to research ideas.
Last month, the state authorized the creation of a two-year pilot program allowing it to sell or auction long-term delinquent accounts.
Rep. Chris Broadwater, R-Hammond, sponsor of that legislation, said in the fourth quarter of 2011 state agencies had more than $753 million in accounts receivable more than 180 days old.
Gov. Bobby Jindal's administration would need to approve any new plan before it could be used. Administration leaders are reviewing collection programs in other states before making recommendations.
Nic Perkin, co-founder and president of The Receivables Exchange, said investors are looking for assets to buy. He told the cash management board, "You probably couldn't have picked a better time than now to look at doing a program like this. There'd be a tremendous amount of appetite, in my opinion, of what you're contemplating here."
Perkin's company functions as an online broker that links buyers of delinquent accounts with the sellers.
Tom Brenan, president of Coface North America Inc., an accounts receivable management firm, recommended to the panel that the state standardize its collection efforts and either boost in-house expertise or hire an outside firm.
