Sunday, June 23, 2024

Court sides with Edwards in fight with state treasurer over unclaimed property

by BIZ Magazine

By David Jacobs | The Center Square

A district court judge has ruled for Gov. John Bel Edwards’ administration in its lawsuit against Treasurer John Schroder over how to handle unclaimed financial assets.

Judge Richard Moore III ordered Schroder to transfer $32.5 million from the unclaimed property fund into state government’s general fund.

Schroder plans to appeal the decision, and legislation currently pending would essentially resolve the question in his favor.

The state’s unclaimed property fund consists of abandoned financial assets such as old checking and savings accounts, unpaid wages, securities, life insurance payouts, uncashed checks, and the proceeds of safe deposit boxes. Historically, lawmakers have spent money left in the fund at the end of the fiscal year.

Last year, State Treasurer John Schroder announced he would not turn over the money, saying state government is only a caretaker for the assets and has no right to spend it. His refusal prompted Gov. John Bel Edwards’ administration to file suit on the grounds that the legislature, not the treasurer, has the constitutional right to dictate spending.

In his ruling, Moore says the relevant law “is clear that unclaimed property is to be treated as state money.”

“Until last year, every state treasurer has complied with the constitutional requirement to transfer these excess funds into the state general fund for appropriation by the Legislature,” said Matthew Block, Edwards’ executive counsel. “Even after the Treasurer complies with Judge Moore’s order, there are more than sufficient funds available for unclaimed property claims, as the fund has always had sufficient funds for these obligations.”

A state constitutional amendment and corresponding statute currently pending would set up a dedicated fund for unclaimed property. State lawmakers could not spend the principal unless the total exceeds the state’s total liability, though any interest earned would go to the state general fund.

“Gov. Edwards is doing a happy dance, but I won’t quit fighting to protect your money,” Schroder said on social media. “Appellate court, here we come.”

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