Gov. John Bel Edwards’ administration and State Treasurer John Schroder are in a dispute over whether state government can spend money that belongs to people who haven’t claimed it yet.
The fight is part of the conversation about how much the state can spend next fiscal year and could wind up in court.
At issue is the state’s unclaimed property fund, which consists of abandoned financial assets such as checking and savings accounts, unpaid wages, securities, life insurance payouts, uncashed checks, and the proceeds of safe deposit boxes. Every year, organizations turn unclaimed assets over to the state when they can’t find the rightful owner.
The current balance in the unclaimed property escrow fund is about $77 million, and the State Treasurer’s office is responsible for returning the money to its owners or their heirs. Since not everyone claims their property at the same time, there’s generally money left over at the end of the fiscal year.
The treasurer can keep $4 million in the fund to pay claims between the June 30 end of the fiscal year and the fall when most of the new unclaimed funds typically start rolling in. Another $15 million comes out each year to make infrastructure bond payments.
Historically, lawmakers spend whatever is left over. While no money was shifted to the state’s general fund last fiscal year, except for the bond payment, an average of $36 million per year was spent on government operations the previous five years, according to treasury staff.