Legislation would protect unclaimed money

At any point in time there is $850 million to $900 million in unclaimed money that is owed to Louisiana citizens.

Our dedicated employees work hard to return this money every day, but as fast as we give it back, we collect more from businesses.

What many may not realize is the state operates the Unclaimed Property Program similar to an IOU.

In a given year, the Department of Treasury may collect around $88 million in unclaimed property, returning around $30 million to citizens.

So what happens to the remaining $50 million?

After paying $15 million on I-49 bonds, your government spends the remaining $35 million on operating expenses.

I want to wean the state off of using this money.

After all, government takes enough out of your wallet as it is.  In order to stop government from spending money that is owed to you, I am proposing we set up a trust fund to protect unclaimed property receipts while addressing infrastructure needs across the state.

This Legislative session, our office will be working with legislative leaders to propose legislation to protect unclaimed property for taxpayers.

We successfully passed similar legislation last year (HB 900).

Unfortunately, the bill was vetoed by the Governor so we are bringing it back up.

The bill would set up a revolving loan bank in connection with a constitutionally protected Unclaimed Property Trust Fund.

The principal of the fund would be protected and readily available when people come to claim their unclaimed money, as it should be.

In return, the earnings on the fund’s investments could be used to make low interest loans to local governments to help fund services and infrastructure projects, such as clean water or sewerage needs.

The bill would be especially beneficial for communities that may not qualify for the state’s Capital Outlay program.

Our estimates show investment earnings on an Unclaimed Property support fund are projected to reach $30 million annually after Year 20.

Assuming deposits of $30 million a year from Unclaimed Property and an investment structure similar to the Louisiana Education Quality Trust Fund (LEQTF), we could loan local governments roughly $13 million a year in 10 years and $37 million a year in 25 years.

To prove this concept can work, look at the LEQTF which supports K-12 and higher education.

The fund has grown from $540 million to $1.4 billion over the past three decades.

Over this same time period, the fund has generated $1.7 billion in earnings to fund research and education projects statewide.

We are optimistic that similar results could be generated through an Unclaimed Property trust fund.

Another successful program is operated through the Georgia Environmental Finance Authority (GEFA).

In 2017, local governments using GEFA financing saved $3 million in interest costs over the life of an average 20-year loan.

We will keep you posted as we move ahead on this legislation, and we would appreciate your support in this endeavor.  We look forward to keeping you updated throughout this process.

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