Editorial: Have no mercy for deadbeats

Wednesday, Oct. 3, 2001 | 8:43 a.m.

State Controller Kathy Augustine announced this week that $147.6 million in old debts is owed to Nevada state government. The staggering sum, which is greater than the $136.3 million in the state's rainy day fund, is owed by merchants and individuals who have written bad checks, have failed to pay bills to the state or haven't paid their business taxes or fees within 60 days.

Of the total, the state Department of Taxation is owed the most money, an amount Augustine estimates to be $92 million. The Department of Taxation disputes Augustine's projection, however, contending that the actual total is only half that amount, with the remainder coming from uncollectible interest, bankruptcies and write-offs.

Even assuming for the sake of argument that the real total is closer to $100 million, as the Department of Taxation suggests, the amount still is a hefty figure, especially during these tough economic times. That $100 million to $150 million could go a long way toward helping Gov. Kenny Guinn to stave off having to make cuts to essential government services in order to keep the state budget balanced. Or to put this in a different perspective, think how this money could be put to good use in a critical area such as education.

The failure to collect bad debts isn't something new to state government -- it has been going on for years. What's needed now is a no-nonsense campaign to get back the money from those who have failed to meet their obligations. Augustine has hired two collection agencies -- OSI of Sacramento and Prime Recovery of Chicago -- to go after many of the delinquent accounts. But it's not enough to wait a few years before going after these individuals and businesses that have failed to make their payments. State agencies need to take the collection of these debts seriously, letting delinquent individuals and businesses know immediately that failure to make good on their obligations no longer will be tolerated.