For Immediate Release
Tuesday, July 15, 2014



Wisconsin's waiting list for unclaimed property at DOR is largest since 1990s

Wisconsin's waiting list for unclaimed property is largest since 1990s

Madison — The list of people waiting to get their unclaimed property back from the state has multiplied sixfold in less than a year, hitting the highest levels since at least the 1990s, new figures show.

The news follows last year's decision by lawmakers to transfer the function to the state Department of Revenue as part of the state budget, taking it away from GOP state Treasurer Kurt Schuller over that elected official's objections. The rising backlog also comes amid a continued debate — even among state treasurer candidates — about whether to eliminate that office.

When responsibility for the property claims shifted from Schuller to the revenue department in July 2013, the backlog stood at approximately 1,200 requests to have property returned, according to Schuller's office. As of June 3, the backlog under the state Department of Revenue stood at 7,300 claims, according to an agency spokeswoman.

Instead of addressing the backlog, the revenue department has focused on developing a $1 million computer system to speed responses in the future and on improving financial and other controls in the unit.

That latest backlog seems "awfully high," said Jack Voight, a Republican who served as state treasurer from 1995 to 2007.

"I don't think that under my administration we reached those levels. Ever," Voight said. "I really believe when you have elected officials, you get better results."

State residents turn to the property program to make claims to money or assets left behind by themselves or relatives and handed over to the state by a bank or other institution.

The previous recorded high of around 3,200 claims came under Democratic Treasurer Dawn Marie Sass in 2009, when the Journal Sentinel reported on the backlog.

Schuller spokeswoman Cynthia Kaump said the treasurer's office returned $33.9 million in property to its rightful owners in 2011 and $35.9 million in 2012. In the first six months of 2013, the office returned $20 million before that unit was transferred to the revenue department.

In the nearly year since then, the revenue department has returned about $22.7 million in unclaimed property, according to that agency.

"Treasurer Schuller believes the Unclaimed Property program should be returned to the Office of the State Treasurer where it was administered with dramatically increased success each year for more than 40 years," Kaump said in an email.

In addition, the Department of Revenue has held only one auction of unclaimed property, going the better part of a year before holding one in recent weeks. Previously in the treasurer's office, the auctions had been held every month.

The property program aims to connect people with unclaimed property such as abandoned safe deposit boxes and estates whose heirs haven't been found.

Jennifer Western, the No. 3 official at the revenue department, said her agency had identified challenges with the unit when it was transferred, including antiquated software, vendor contracts that were outdated and no longer reflected the current arrangements, and a lack of up-to-date procedures for handling claims.

Western said that for the past year the agency has been working on $1 million in technology upgrades required in part by lawmakers to improve claims processing and had contracted with the private firm FAST Enterprises LLC of Greenwood Village, Colo. She also said April to June is a peak time for claims because unclaimed property notices are published in newspapers during those months.

Those programs include using state tax information to allow for automated searches for the owners of unclaimed property and to allow businesses holding unclaimed property to report it electronically to the state using their online tax account. By 2015, the state should be able to return unclaimed property to individuals by adding it to their tax refund, said Western and Jack Jablonski, the deputy secretary at the revenue department.

"DOR has and will continue to focus on implementing the changes that allow us to use income tax information to identify unclaimed property owners. This will make the process more efficient, provide better service and immediately reduce the backlog," Western said.

Jablonski pointed out that the revenue department is able to handle millions of income tax returns and payments each year.

"We believe we are quite capable of processing these claims," he said.

Western said she didn't have figures for the backlog at the time the property unit arrived at the revenue department but said it was 3,843 claims at the beginning of September 2013.

Over the years, lawmakers and the governor have stripped the treasurer's office of nearly every responsibility, so that it no longer has oversight of state finances or much else. Schuller, who is paid $68,556 a year, has just one main duty — serving as one of three members of the Board of Commissioners of Public Lands.

For that reason, Schuller himself ran in 2010 on a platform of eliminating his office, a step that would require a change to the state constitution. A proposal to do that passed the Assembly last legislative session but stalled in the Senate and as a result Schuller is stepping down after one term, as he promised during his campaign four years ago.

The five candidates running to replace Schuller disagree on whether to eliminate the treasurer's position or to rebuild it by returning some of its duties.

So far, lawmakers have chosen a different path — making the office irrelevant.

In 2011, they transferred control of the state's college savings programs from the treasurer to the Department of Administration. Then in May 2013, lawmakers on the Joint Finance Committee voted 11-3 to shift the unclaimed property unit from the treasurer's office to the administration of Gov. Scott Walker, who later approved the budget with that provision.

The motion was made by budget committee co-chairs Rep. John Nygren (R-Marinette) and Sen. Alberta Darling (R-River Hills) and was opposed by Sen. Glenn Grothman (R-West Bend), Rep. John Klenke (R-Green Bay) and Rep. Jon Richards (D-Milwaukee).

"I voted against it because in my experience, all treasurers monitor the unclaimed property division with an unbelievable zeal and I think another agency isn't as likely to do that," Grothman said.

Rep. Tyler August (R-Lake Geneva) is among those who argued for both transferring unclaimed property away from the treasurer's office and eliminating the office altogether. August also sponsored a measure approved in April that establishes a process for tracking down unclaimed property owners by checking their names against those on the state income tax rolls.

August said he wasn't worried about any initial problems and that over time the revenue department would run the program more successfully because of its much greater resources.

"I think in the long run, it's the way to go," August said.

But Assembly Minority Leader Peter Barca (D-Kenosha) said state revenue officials should have to prove to lawmakers that they will address the backlog. Otherwise, the unclaimed property unit should return to the treasurer's office, he said.

"One of those two things should happen," he said.

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