CHAMPAIGN — As the state comptroller begins withholding money from tax refunds and employee paychecks, local communities have begun receiving thousands of dollars they are owed in unpaid parking tickets and other debt.
The money isn't exactly pouring in, but state and city officials say the new program is allowing them to collect on old debt and generate some extra revenue without burdening taxpayers.
Champaign, so far, has collected $12,188.74 since it began receiving payments in May, according to the city's finance office. City officials expect to collect around $170,203.50, about 45 percent of the money owed in 7,809 unpaid parking tickets it submitted to the state for collection.
There could be more if city officials decide to submit other debt to the comptroller's office for collection. The city is owed a few hundred thousand more in miscellaneous debts like recycling fees, sanitary sewer fees and nuisance abatements like property code violations.
The collection of unpaid parking fines is being used as a trial, before administrators submit more claims to the state.
"We haven't moved forward on that yet because we were waiting to see how the parking would fare," said Champaign financial analyst Matt Robinson.
Urbana has collected even more. The city has already received about $48,000 from the state and has at least another $23,000 on the way, said interim city comptroller Bill DeJarnette. That's out of the roughly $186,000 worth of unpaid parking fines Urbana turned over for inclusion in the state database.
DeJarnette said the city is pleased with how the program has been working, and will continue to evaluate which records to share with the state comptroller.
He said the program streamlines the process by which cities collect unpaid debt — which in the past may have involved direct contact with the debtor or, in some cases, legal action.
"It would be revenue that is difficult for us to collect," DeJarnette said. "And frankly, from the person that owes the money, it would be more painful for them for us to collect it. The follow-up would be much more expensive. This is very efficient."
Champaign and Urbana both joined the so-called "local debt recovery program" last year. The program is administered by state Comptroller Judy Baar Topinka's office, and it enables the comptroller to withhold a portion of the payments the office makes.
The comptroller signs off on checks like income tax refunds, lottery payments, commercial payments and paychecks for state employees. The payees' names are run against a database of collection claims, and if there is a match, the comptroller may withhold part of the payment.
That withheld portion then goes back to the agency to which the money is owed, but the computer will only flag a payment if that agency has joined the program and submitted the claim to the comptroller's office. The comptroller also withholds a $15 administrative fee.
There are conditions: The outstanding debt must be at least $50 and no more than 7 years old, and the state can withhold no more than 25 percent of the amount of the state check that was to be issued to the debtor.
The debtor has an opportunity to appeal. When the debt database flags a name, the money owed is transferred into a trust fund for 60 days. The debtor is notified and given two months to challenge the action.