Connecticut Digs Out of Deficit Using Unclaimed Property (at least, for now)
In a December 1, 2010 budget forecast to the governor, Connecticut comptroller Nancy Wyman projected that the state would run an $18 million deficit for the current year. Now, however, according to the Connecticut Mirror, a substantial increase in the amount of unclaimed property collected by the state may result in a budget surplus. Specifically, according to the State Treasurer’s office, Connecticut has brought taken custody of more than $92 million in unclaimed property (compared with a projection of $50 million).
The article also notes, however, that claims for the first 5 months of the fiscal year are more than double that of this time last year, suggesting that any budget relief may be temporary. This, we suppose, is to be expected. As states continue to shorten dormancy periods and become more and more aggressive in requiring holders to report and remit unclaimed property, they will take custody of more and more property that is not “really” abandoned. Accordingly, attempts to leverage more restrictive unclaimed property laws into additional state revenue are inherently limited by the owners’ largely unconditional right to reclaim the funds.