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Article updated: 6/13/2012 12:24 PM

Unpaid tickets, tuition? Tax refund or lottery prize could be docked

 

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If you owe money in water bills or college tuition, you could see it come right out of your state paycheck or state tax refund and go into the coffers of your local village or community college.

A growing list of municipalities and school districts across Illinois are trying to recover money they say is owed to them through the Local Debt Recovery Program, a law that went into effect Jan. 1.

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Local debt recovery program

Here are the local units of government -- out of about 40 statewide -- that have entered into intergovernmental agreements with the Illinois comptroller's office to recover money they are owed through the Local Debt Recovery Program, which went into effect at the beginning of 2012.
Actively recovering money Total to date
Chicago $6.8 million
Elk Grove Village $31,000
College of DuPage $34,600
In process of setting up debt recovery
Addison , Aurora, Crystal Lake, Des Plaines, Kildeer, Lindenhurst, Pingree Grove, Prospect Heights, St. Charles, Wheeling, Waubonsee Community College.
Source: Illinois comptroller's office

The law allows local units of governments -- including townships, fire protection districts, library districts and more -- to enter into intergovernmental agreements with the Illinois comptroller's office, which administers the program by diverting money from state-issued paychecks, tax refunds, commercial vendor payments or lottery winnings, said Brad Hahn, spokesman for the Illinois comptroller's office.

In the Northwest suburbs, Elk Grove Village and College of DuPage already are recouping money through the program. Altogether, about 40 units of government statewide, including Chicago, Aurora, Joliet, Springfield, Lakeland Community College and the Boone County state's attorney's office, have passed intergovernmental agreements with the comptroller's office; it usually takes several weeks, sometimes months, to get the technology set up and tested, Hahn explained.

"This bill was designed to allow local governments to collect money they are already owed without having to raise fees or taxes," he said.

Last week, officials in St. Charles announced they would join the program. Officials had no estimate yet about how much outstanding debt is owed to the city, but with no cost to join the program, aldermen said the idea was a "no-brainer."

The Pingree Grove village board recently voted to join the program, too. Village Administrator Ken Lopez said the village has to calculate yet how much money it is owed in unpaid water bills and miscellaneous fines. Deputy Police Chief Shawn Beane estimated that there is about $6,000 in outstanding parking tickets and ordinance violations. Speeding tickets are not included in this process, Beane said.

"We could do all sorts of things with that money. Everything from buying new police equipment to computers to upgrading our radios," Beane said.

That $6,000 might not seem like much, but for a tiny village with a $1.6 million budget, it's nothing to sneeze at.

Pingree Grove has used collection agencies in the past, but those keep a percentage so the village doesn't recoup all the money it is owed, Lopez said.

"Having this in place gives us the ability to collect outstanding bills when people move out," he said. "Sometimes they don't submit a forwarding address. Sometimes they don't respond and don't pay, but you can't shut their water off (anymore)."

The comptroller's office notifies people by letter when money is withheld from a check, Hahn said. The program charges a $15 fee, paid by the person who owes the debt, to administer the program.

There is no cap to how much debt can be recovered in one lump sum from tax refunds, lottery winnings or commercial payment checks, but the amount recovered from each state payroll check can't exceed 25 percent of the employee's net income, Hahn said. People who believe they have been unjustly targeted have 60 days to contest the debt recovery and provide supporting documents. The office has received about 1,900 protests out of 65,000 instances of debt recovery, Hahn said.

"Money is often returned within a week in the event of a successful protest. But the length of the process can vary depending on the complexity of the protest, the exchange of documentation, etc.," Hahn said. The local unit of government is responsible for providing accurate data to the comptroller's office, he said.

College of DuPage officials learned of the program in January and began collections through the comptroller's office in February, college spokesman Joe Moore said. COD is pursuing collection of about $34,600 in tuition from a total of 20 students; the college usually relies on collection agencies to recoup tuition payments, Moore said.

Though the new program is in the early stages, "it seems to be a good partnership with the state to recover funds," he said.

Elk Grove Village signed up with the debt recovery program at the end of February. Using collection agencies to go after people delinquent on their water bills, police citations and other village fees was only marginally successful, Elk Grove Village Manager Raymond Rummel said.

The village is expecting to receive $31,000. Most of the unpaid debt is from nonresidents, Rummel said.

Officials will give people plenty of notice before sending their information to the state for collection, he said.

"Obviously, the state being able to collect funds directly from someone's tax return is much more efficient for everybody," Rummel said. "It clears up their debt. It clears up their credit rating. There's also a benefit to the honest, hardworking taxpayers who have paid their debts on time."

Debt cannot be recovered from checks issued through the Illinois Department of Aging's Circuit Breaker program, secretary of state refunds or Illinois Prepaid Tuition Trust Fund payments, Hahn said.

• Daily Herald staff writers Christopher Placek and Madhu Krishnamurthy contributed to this report.

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