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US states take cash to fill coffers

Cash-strapped US states are replenishing their coffers by pouncing on neglected bank accounts, share certificates and travelers’ checks.

Under US law, public authorities can seize funds if they have been left untouched for a certain period — the length of time varies from state to state.

Several states have cut this waiting period in order to get their hands on potentially lucrative assets more quickly.

An estimated US$5.2 billion of unclaimed assets went to US state governments in 2006 — an increase of a third on 2003, figures released by USA Today show.

Michael Fitzgerald, former head of the National Association of Unclaimed Property Administrators, told the US newspaper: “I’m not going to deny that [some] states have looked at this as a revenue-generating activity.”

However, he added: “There’s a vast majority of states that want to return the money to rightful owners.”

Several states including Washington, Alabama and Oregon have changed rules to seize abandoned property within three, instead of five years, although the rightful owners of such funds can subsequently reclaim them from state authorities.

According to the Center on Budget and Policy Priorities, a Washington-based think tank, 29 US states face budgetary shortfalls totaling US$48 billion this year.

The sub-prime mortgage crisis and the ensuing downturn in US house prices have caused property tax revenues to drop. Tax on related items such as sales of furniture, appliances and construction materials has been similarly weak.

The think tank says the biggest budget gaps are in states where the housing slump has been most acute — such as Nevada, California, Arizona and Florida.

Local governments are also facing a headache in dealing with the high cost of fuel. One district in Seattle has cut back on school buses. In part of Ohio, sheriffs’ deputies have been told to use golf buggies rather than cars and a city in Oklahoma has stopped mowing much of its grass.

The National Conference of State Legislatures recently described states’ tax revenue as “anemic” and their financial positions as “worse than expected.”

The few exceptions are states rich in minerals, such as Alaska and North Dakota, which have benefited from the surge in commodity prices.


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