Business groups and lawmakers are raising red flags over the state’s increasing reliance on so-called abandoned property – the uncashed corporate checks and inactive savings accounts now an oversized portion of Delaware’s cash-strapped budget.
The Delaware Department of expects to collect $631 million from abandoned property next year, up 29 percent. With traditional business and personal taxes still sagging in the wake of the recession, abandoned property collections are expected to fund 15 percent of regular state spending, say projections – up from just 3 percent back in the 1990s.
Delaware, which has also come under fire for aggressively pursuing unclaimed cash, spends about $30 million annually going after the. That bill includes millions in payments to third-party auditors who pore over corporate books for unclaimed cash that can be escheated – turned over to the state.
By comparison, Maryland collected just $78 million last year in similar revenues.
Disturbing, but here, however, is what should have been the "money" paragraph used for the title:
Gary Simpson, a leading state Republican who sits on the Delaware Economic and Financial Advisory Council, which provides estimates to the state, called Delaware’s reliance on abandoned property revenues “a scary situation. It’s an unsustainable source of revenue, in my opinion,” he said. Even worse, Simpson added, “I think people look at it as sort of a robbery by the government.”Read the whole thing.