When a debt is owed to you, it can be difficult to collect.
Sometimes state government finds itself in the same position. Restitution payments and court-ordered child-placement costs, fines for hunting violations, unpaid business taxes, reimbursements for damage to state property, or fees owed to a university can also be hard to collect. These unpaid obligations place a greater financial burden on other taxpayers.
Until a couple of years ago, each state entity tried to collect debts on their own. The Unified Judicial System, Secretary of State’s Office, Board of Regents, Department of Revenue, and Game, Fish and Parks each had their own debt collection systems. That approach was inefficient and did not achieve the desired results.
South Dakota now has a much more effective way to recover money owed — the Obligation Recovery Center. This new centralized system doesn’t just recover dollars owed to the state; it also helps crime victims and single parents owed money by convicted felons.
In 2015, the Legislature established the Obligation Recover Center to improve the state’s debt-collection efforts. Now, in the instances where agency efforts to collect debts prove unsuccessful, those debts can be referred to the center, which imposes penalties for non-payment.
For debts exceeding $50, hunting and fishing licenses can be suspended. For debts exceeding $1,000, the state can place blocks on driver licenses and motor vehicle registrations. And for those who still do not work toward reducing their debts, their cases are referred to third-party debt collection agencies.
The Obligation Recovery Center is a more active approach toward debt collection. Still, it is important to understand that a debtor does not have to repay a debt in full to regain privileges. A debtor must simply agree to a payment plan to avoid these penalties.
The results of the new system have been promising. In its first year of operation, the Obligation Recovery Center has recovered more than $3.3 million. In addition, payment plans have been established that will collect another $7.6 million.
Around 63,000 cases have been referred to the center and only 24 individuals have appealed their cases to an administrative hearing, which is an indication that the process is largely working as it should.
For the single parent who is owed child support or the crime victim who is owed restitution, the new process is making a big difference. Just as importantly, it’s advancing fairness for the taxpayer.