South Dakota surprise: $70M windfall
By Carson Walker SIOUX FALLS (AP) -- Changes in unclaimed property law and moves by two big banks in South Dakota have filled the state's coffers with about $70 million of unexpected revenue. It includes account balances and other items of value ...
By Carson Walker
SIOUX FALLS (AP) - Changes in unclaimed property law and moves by two big banks in South Dakota have filled the state's coffers with about $70 million of unexpected revenue.
It includes account balances and other items of value that businesses, governments and other institutions must turn over to the state where they reside when the owner can't be found. For example, savings and checking accounts, life insurance policies, overpayments or rebates and gift cards.
The state expected about $53 million but took in almost $122 million.
There were two main reasons for the largesse.
South Dakota legislators changed the law so unclaimed property now must be sent to the state after three years of account inactivity, instead of the previous five years. That meant getting some accounts two years earlier than they would have.
Meanwhile, Wells Fargo consolidated and moved its accounts and those from its acquisition of Wachovia into South Dakota. And Citibank moved its retail home office to the state. Its credit card operation started the banking boom when it moved here in 1980.
The state treasurer's office is charged with trying to find the owners of unclaimed property, but when it can't, the money accumulates in the state's general fund. Because many of the account holders are from other states and countries, it's more difficult to find those owners, so much of it will stay in South Dakota, said Rich Sattgast, state treasurer.
"They have people that live in other countries that trust American banks," he said.
The state's chief financial officer, Jason Dilges, said the original estimate of $53.4 million in ongoing and one-time unclaimed property already has been spent, which leaves roughly $70 million for the governor and lawmakers to divvy up when the legislative session starts in January.
He and Tony Venhuizen, spokesman for Gov. Dennis Daugaard, declined to say what the governor plans to propose for the unexpected income in his Dec. 3 budget speech. Last year, Daugaard outlined four preferable uses for such one-time revenue.
"We should eliminate a liability, build or improve an asset, secure an asset, or endow a program for the future," he said. "We owe it to South Dakota to use the revenues we have available to improve the structural soundness of our state for future generations."
To eliminate some of the debate about what to do with unclaimed property, the Legislature earlier this year passed a law to dedicate a certain portion toward economic development. In the budget year that starts in July, 25 percent will go into the newly created Building South Dakota Fund and in 2016, 50 percent of unclaimed property received will go toward it.
The $70 million won't be subject to that because it came in this year.
The South Dakota Housing Development Authority, state Department of Education and Governor's Office of Economic Development will accept applications for grants and loans and award the money.
Gettysburg Republican Sen. Corey Brown, who sponsored the measure, said the idea was to fund economic development without relying on taxpayers. It also ensures that the state doesn't fund ongoing projects with one-time money, so if unclaimed property revenues dip or there's a large number of big payouts to owners, less would be paid out of the economic development fund, he said.
"We made a favorable environment for the banking industry in South Dakota, which has led some larger outfits to relocate here. What that means here is that when they have unclaimed property, because their headquarters are here, the state of South Dakota would get that," he said.
People who want to see if they have any unclaimed property owed to them in South Dakota can go to the state treasurer's website or download the mobile app by searching for "South Dakota treasurer," Sattgast said.
His office has received nearly 9,000 claims in the past week alone, he said.
Robert Schlesselman, of Rapid City, recently ran his name through the website after someone posted a link to Facebook and learned he had $67 owed to him from an overpayment for car insurance.
"With the times we're in, it's always nice to get some money that is yours," he said.
Visit the Treasurer's Office website .