State audit urges Oregon to get tougher with deadbeat debtors
SALEM, Ore. -- A state audit says Oregon should take off the gloves when it comes to trying to collect the $1.3 billion owed in back taxes, overpayments of food stamp and unemployment benefits and other debts.
Oregon recovers about $150 million a year just in past-due income taxes alone.
But the audit recommends the state do more, such as contacting more debtors by telephone first instead of by mail, asking the Legislature for more staff positions and relying more on private collection companies.
As things stand state budget officials project a shortfall of $300 million to $500 million over the next two years.
Oregon recovers about 18 percent of past-due debt with its initial collection efforts, on par with the national rate, according to a May report by state Controller John Radford.
"We're always looking for ways to improve," said Jon DuFrene of the Department of Administrative Services. But he said some debts, such as fines against criminals, are all but impossible to recover.
"We are going to experiment with new ideas," DuFrene said, "and are talking with other states to see what works."
Auditors say the Department of Human Services should employ a common practice in the debt-collection industry and make initial contact by phone and hope for a response. The report stated there is no sign that is being done.
Paul Pickerell, finance recovery manager for the Human Services Department, said the agency has 10 collection agents to recover overpayment of food-stamp and general-assistance benefits but each monitors more than 6,000 cases.
Pickerell said the department hopes to add two staff collection agents that will pay for themselves, since each recovers an average of $45,000 to $50,000 a month.
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