Thought Leadership Thursday
The People Of Louisiana Protect Unclaimed Property
Thought Leadership Thursday Article
This past August in this weekly column, I shared with you that the people of Louisiana would vote in November on whether to protect Unclaimed Property in a constitutional trust fund. I promised to update you on the outcome.
I am pleased to announce the amendment passed with 1.2 million Louisiana citizens voting in favor of it. That’s an overwhelming show of support with 64% of the vote.
At the end of each year, we will now deposit into the trust fund any money not returned to owners. We will be able to protect Unclaimed Property so it will always be there for people to claim. As a bonus, the interest earnings from the trust fund will create a state revenue source that does not raise taxes. In tough economic times, that is truly a win-win.
For years, any Unclaimed Property we did not return in a given year was folded into the state budget. By 2020, the state of Louisiana had spent $600 million in Unclaimed Property in the state budget. Eventually the practice left us without sufficient money to pay claims. Twice in two years, we had to halt claims processing and wait for additional money to come in because we did not have the cash to pay pending claims.
It is tough to tell people to wait a few weeks for money that belongs to them, especially during an economic downturn. A few weeks ago, we returned 750 savings bonds to the son and grandchildren of a woman who died in 2011. Two of the grandchildren are out of work because of the pandemic. Those savings bonds were like pennies from heaven to that family.
With the trust fund, we will never have to turn someone away.
Here is how the trust fund will work. We will pay claims and other expenses and obligations of the Unclaimed Property Program. Then we will deposit the monies left over into the trust fund, which will grow until the balance is sufficient to cover the amount owed to owners. Investment earnings on the trust fund will flow to the state budget. The principal will always be there to pay claims.
The trust fund is a fair solution, and that is why it drew strong support from chambers of commerce and the media. It is hard to find fault with protecting people’s Unclaimed Property.
Let me wish all of you a very happy and healthy Thanksgiving.
John M. Schroder
Louisiana State Treasurer