Passed bill could generate $200 million in revenue
HARRISBURG _ The Legislature passed a bill Saturday that is expected to generate almost $200 million in additional revenue for the state in the upcoming fiscal year by allowing unclaimed property to be sold earlier. The bill, passed as part of the $20.7 billion budget package for 2002-2003, was authored by Sen. Joe Conti. It amends the state’s unclaimed property law so that the state can take possession of most unclaimed property after five years, instead of the current seven years.
Over the long run, the state probably won’t make any more money than it already does from unclaimed property because it will get the same amount of property, regardless of whether it claims it in five years or seven years. But if passed, the change is expected to generate $198 million in additional non-tax revenue next year, according to the state treasurer. This would give a much-needed boost to the state, which is facing a nearly $1.2 billion tax revenue shortfall by the time the current fiscal year ends Sunday.
“This has been a difficult budget year, so the additional funding this legislation will make possible is certainly welcome news,” said Conti. “Other states have done the same thing and have doubled or even tripled their revenues; therefore, I think it was prudent for Pennsylvania to do this, particularly during these uncertain times.”
In 2001, the state raised about $50 million for the general fund from unclaimed property, such as dormant bank accounts, stocks and unredeemed gift certificates. The state assumes custody of financial assets that have been without activity for seven years. Non-cash items, such as jewelry, are auctioned off for money. But if state officials can locate a property’s rightful owner, it returns the property. About one in every 14 Pennsylvanians has unclaimed property, treasury officials estimate.
Most states take possession of unclaimed property after five years. Only five states have a waiting period of seven years or longer before unclaimed goods can be sold. Some states allow unclaimed property to be sold after as little as three years. New Jersey has the longest waiting period, 10 years.
Under Conti’s bill, the state can claim almost all unclaimed property after five years, but there are some exceptions, such as travelers checks, which can’t be claimed until 15 years have passed. Wages, though, can now be claimed after three years, instead of seven.
After the initial windfall next year, the state is expected to generate about $50 million from unclaimed property annually in ensuing years.