Bill to Improve States Collection Practices Could Generate $157 Million Over Five Years

BATON ROUGE, LA – A bill that could generate $157 million over five years by improving the state’s debt collection processes is heading to Governor Jindal’s desk for his signature, according to State Treasurer John Kennedy. Final passage of House Bill 629 by Rep. Chris Broadwater (R) and Rep. Ted James (D) occurred today after the bill made a brief stop in conference committee.

“We are now one step away from significantly improving the way the state conducts its business, and this will be a tremendous help with our annual budget struggles,” said Treasurer Kennedy. “Many of our budget problems could be solved by making simple changes to the way we collect the money owed to us.”

Louisiana currently has $1.6 billion in outstanding receivables, which are various fees and payments that are owed to the state that have not been paid. Approximately $690 million of that amount is 180 days past due.

“No business in the real world would go about its operations without checking accounts receivable every week,” said Treasurer Kennedy. “On top of that no business in the real world could afford to have almost half of its receivables go 180 days past due.”

All state agencies and departments are required by law to report information about receivables on a quarterly basis. HB 629 would also make it mandatory for agencies to refer unpaid receivables to a central unit for collection.

According to a report from CGI Technologies and Solutions, Inc., if the state continues its current debt collection practices, only $26 million out of $2 billion owed would be generated over the next five years. Based on benchmarks in other states, Louisiana could collect an additional $157 million by implementing improved collection practices.

“California brought in $2 billion by improving its debt collection practices,” said Treasurer Kennedy. “If we could improve our collections by just 10 percent, think of what it could do for our budget.”

Contact:
Sarah Mulhearn
(225) 342-0012
smulhearn@treasury.state.la.us