The Louisiana legislature must change its approach to the handling of unclaimed property, according to state Treasurer John Schroder– and he says he has already taken a big step that direction.
Schroder has taken an aggressive stance on unclaimed property, which has led to a five-fold increase in the number of checks his office has sent taxpayers this year.
The unclaimed property program implemented by Schroder has returned $44 million to Louisiana residents during the current fiscal year, he said. That figure eclipses last year’s record high of $35.5 million in total returned property.
The balance of money unclaimed by Louisiana citizens each year is swept into the general fund and spent on general government.
“In my research on how money comes in, I don’t think the state should be spending it,” Schroder told the Press Club of Baton Rouge at its weekly luncheon Monday. “It’s not the state’s money, it’s not the legislature’s money, and it’s not the treasurer’s money.”
Louisiana owes $852 million in unclaimed property, and the state government has made little effort to return money to the actual owner, he said.
“The state is the custodian of our revenue,” he said. “I don’t think a custodial spends the money and says, ‘see you later.’ “
The state issued 32,000 checks last year for unclaimed property, but Schroder expects his office to send 175,000 checks this year.
The property includes money from insurance, banks, stocks, securities and unclaimed deposits on various college-related services. It does not include unclaimed land holdings.
An improved budget picture triggered the spike in checks last year.
Previous state budget crunches left Schroder’s office only $1 million in the coffers, which forced a delay until the end of the year on the issuance of checks.
“It was like going to the bank with a $100 check and having the bank telling you to come back in 120 [days] because they don’t have the money,” he said.
State government owes the unclaimed program approximately $852 million. Louisiana implemented the unclaimed property program in 1852.
Schroder proposed a plan to invest the unclaimed revenue in a trust fund that would be off-limits to state government. The funds unclaimed would go into an investment fund and put the interest in a revolving loan program.
It could funnel additional revenue into the state infrastructure.
“We have a few projects there, as you know,” Schroder said. “It’s a ‘common sense’ approach, and the only people who oppose that are people in state government.”
Employees in Treasurer’s Office have worked overtime to clear the backlog, but it would likely take 20 more employees to bring it up to date.
A constitutional amendment goes before the state legislature that would dedicate unclaimed property funds and establish the Louisiana Unclaimed Property Trust Fund. House Bill 291, filed by state House Speaker Taylor Barras, R-New Iberia, would fund claims by owners of unclaimed property, and create the Louisiana Unclaimed Property Permanent Trust Fund.