Nice Problem to Have: South Dakota Governor and Legislature Discussing How to Spend “Extra” $35 Million in Unclaimed Property
The Rapid City (SD) Journal recently published a story concerning a tug of war between the South Dakota Governor and State Legislature concerning how to use an “unexpectedly large” collection of unclaimed property. According to the article, the state collected almost $70 million in unclaimed property during the past year – more than $33 million more than expected. The windfall is apparently due to the state’s recent decision to shorten the dormancy period for most property types from 5 years to 3 years and the movement into South Dakota of certain companies and financial institutions. As we previously noted, that same legislation also reduced the number of published notices to owners from two to one, and increased the dollar threshold for publishing such items from $50 to $250. The shortening of dormancy periods and increase in notice threshold are becoming regular tricks for states to (temporarily and artificially) increase state revenue.
According to the Journal article by Bob Mercer, the legislature wants to use the extra cash for economic development, while the governor wants to use the money to pay off some existing state debt. As is often the case, neither side is suggesting that the funds be used to increase outreach efforts to get the money back to its rightful owners.