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Iowa court officials' debt-collection plan now five months overdue

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buy this photo Iowa court officials' debt-collection plan now five months overdue

DES MOINES - Plans calling for Iowa courts to enlist the help of private collection agencies to recoup delinquent debt from scofflaws are past due.

State lawmakers approved and Gov. Chet Culver signed legislation last year setting a goal for judicial branch officials to have in place a contract with a private collection business by Aug. 1 with hopes that the stepped-up enforcement would net the state an extra $22.7 million in revenue this fiscal year.

However, state court administrator David Boyd said both the implementation date and the revenue target were overly optimistic given the complexity of the task spelled out in Senate File 2428 and a lack of additional funding needed to accomplish it.

"It's not like we can just push a button right now and push that debt to somebody and say here, go get it. It takes a lot of work to get that done," Boyd said.

"You have to be realistic about what the outstanding debt really is," he added. "I think we can always improve and get more, but I for one am not going to tell you there's a silver bullet that all you have to do is farm it out and great things are going to happen. It's a little more complicated than that."

Court officials have received preliminary information from several private businesses that offer a range of collection services, Boyd said. But, they are not yet in a position to seek contractual proposals or fund a project at a time when the governor has ordered the judicial branch to reduce current-year spending by nearly $2.3 million as part of a 1.5 percent across-the-board cut that took effect today.

"We're trying to do as much as we can with no money," he said.

Lawmakers who are scouring state government for any savings or increased revenue to balance their budgets expressed disappointment with the lack of progress and expected the topic of enhanced court collections will be revisited when the 2009 session convenes Jan. 12.

"We'd like them to pursue it more aggressively," said Senate Majority Leader Mike Gronstal, D-Council Bluffs.

Sen. Bob Dvorsky, D-Coralville, chairman of the Senate Appropriations Committee, applauded the fact that court officials had been able to accomplish several pieces of the multipronged collections' bill.

Court officials at the state and county levels are working to better coordinate collection efforts and the legislation allows state licensing agencies to refuse to issue or renew, or to suspend or revoke, the professional license of a person whose name appears on the debtor list.

Also, gamblers who win a big jackpot at state-licensed gambling tracks or casinos now face the prospect of going home empty-handed if they owe income taxes, child support or other payments.

The Iowa Racing and Gaming Commission has adopted rules requiring gaming enterprises to run government database checks on the names of all players winning $10,000 or more on a slot machine or on a horse or dog race and to garnish winnings of individuals whose names appear on the "debtor list" - a practice already employed by the state lotwtery.

Dvorsky hoped the funding issues related to the private-collection piece could be resolved as lawmakers work on supplemental appropriation and de-appropriation measures once they reconvene so the major crux of S.F. 2428 can be accomplished.

Legislators had hoped an assist from private collectors could put a dent in the $476 million in unpaid criminal judgments, civil fines or past-due parking tickets - some of which is uncollectable - that were delinquent when the legislation was adopted. Court debt is deemed delinquent if it is not paid within 30 days after the date it is assessed.

"It's an attempt to try to take a different course because we haven't been overly successful in collecting this debt," Dvorsky said. "This is an attempt to take a newer course and a way that's worked in other places. Hopefully we can get it to work here."

Court collections for fiscal 2008 totaled about $128 million, up 7 percent from the $119 million taken in for fiscal 2007, Boyd said. About $30 million of the yearly total never makes it to the general fund because the money gets diverted to victim restitution and damages, child-support payments and a number of other accounts.

Debt includes all fines, penalties, court costs, fees, forfeited bail, surcharges, victim restitution, restitution of court-appointed attorney fees or expense of a public defender, or correctional fees.

Contact Rod Boshart at newsroom@wcfcourier.com.

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