Everyone likes free money. But with the Wyoming Legislature facing a more than $700 million deficit in education funding, lawmakers are especially eager for ways to generate new revenue without raising taxes or fees.
That thirst for new cash has led them to reexamine outstanding payments owed to the state. People or companies owe Wyoming roughly $80 million.
While $80 million may not sound like much considering the state’s total budget, legislators at the Interim Joint Revenue Committee meeting in Buffalo last week were plenty interested in recovering it.
“Every dollar we can collect is a dollar we don’t have to raise,” said Rep. Mike Madden, R-Buffalo.
(The revenue committee has been tasked by legislative leadership with generating proposals to raise $100 million, $200 million and $300 million and passing along recommendations to the Legislature.)
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Rep. Don Burkhart, R-Rawlins, reached out with a private contractor that recently began debt collection for South Dakota. CGI Group, which is based in Canada but has existing contracts with the state of Wyoming, has offered to conduct a free assessment of the state’s current collection practices and offer recommendations.
One solution may be hiring CGI itself to start collecting on the $70 million to $84 million currently owed to the state. The company’s arrangement with South Dakota is free to taxpayers, with CGI being paid with a percentage of the payments it collects.
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Burkhart said that before CGI began working with South Dakota that state was operating similar to how Wyoming currently does, with each agency responsible for collecting its own payments and a lack of consistency.
“Some of them were OK at it and some weren’t,” he said.
State auditor Cynthia Cloud agreed that using an outside contractor to help collect on debt owed to the state would be helpful.
“This is something that’s a gap in the administration of government,” she said. “It’s really not the main focus of agencies.”
The committee agreed to advance a bill that will allow state agencies to add a 20 percent surcharge to past-due payments. The fee is intended to both serve as an incentive for people and companies to make payments on time as well as a way to fund the collection of debt if a private contractor like CGI is hired.
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James Hale of CGI said that the company could provide both the software needed to consolidate payments owed to every state agency as well as collections staff. Hale said CGI would be able to execute best practices in debt collection, such as automatically sending letters to debtors.
Hale said CGI had collected 27 percent of the debt owed to South Dakota. An equivalent performance in Wyoming would generate $15 to $20 million.
While lawmakers were supportive of doing more to collect debt owed to the state, some chafed slightly at the actual debt collection methods mentioned by Hale. When Hale described predictive dialers — which allow call centers to be more efficient — Sen. Cale Case, R-Lander, was unimpressed.
“That’s wonderful,” he said dryly.
Variation among agencies
Much of the money owed to the state is in the form of unpaid fines issued by courts. While unpaid state taxes also account for some of the outstanding money, Department of Revenue Director Dan Noble said that his agency was relatively efficient at collecting debt. Tax bills increase by 10 percent for each month past due and agency investigators travel the state to collect payments.
Lawmakers agreed that even if a private contractor is hired to do the state’s debt collection, each agency could still maintain some autonomy. For example, while some agencies might want to immediately refer all outstanding payments to the centralized debt collection system, others like the Department of Revenue might attempt to collect the payments for several months before turning the remaining balance over to the centralized system.
The Legislature may also consider suspending Wyoming Game and Fish licenses and even driver’s licenses of state residents who owe money to public agencies.