New York Faces a $20 Billion Deficiency in Cash; A New Contender Promises to Recoup This Loss
In the bustling state of New York, the management of unclaimed funds has stood out as a model for efficiency and convenience compared to many other states. The Office of the New York State Comptroller (OSC) plays a pivotal role in this process, returning over £2 million daily on average to rightful owners [1].
The OSC's unclaimed funds program has been bolstered by recent legislation, accelerating payments by allowing the direct mailing of checks to eligible individuals for newly reported accounts valued at £250 or less. This streamlined approach enhances the speed and convenience of the process [1]. OSC staff also participate in community events statewide to assist individuals in searching and claiming their funds, emphasising outreach and personalised assistance [1].
For those unable to attend in-person events, an online claiming system and a toll-free number offer improved accessibility [1]. The online system enables residents to search for and claim their lost funds easily, demonstrating New York’s adoption of digital tools for managing unclaimed property [1].
While many states have unclaimed property programs, New York’s volume of daily returns and its proactive mailing of smaller claims suggest a relatively efficient and claimant-friendly system. For instance, Wisconsin's unclaimed property program focuses more on reporting compliance rather than direct claimant facilitation [3]. Other states may not have comparable direct mailing programs for smaller claims or may rely more heavily on claimants to initiate in-person or bureaucratic procedures.
New York’s emphasis on community outreach and an easy-to-use online system is a modern approach that some states may not yet fully embrace. The total pot of unclaimed funds has swelled from £7.2 billion in 2006 to over £20 billion. However, the current situation reveals a stark contrast: while the OSC only has about £100 million of the money on hand, state lawmakers owe a tab of about £20 billion [2]. Last fiscal year, lawmakers treated nearly £900 million in unclaimed funds as revenue to spend [2].
Recently declared comptroller candidate Drew Warshaw has proposed repaying the entire pot of unclaimed funds as soon as "humanly possible" [4]. He believes the comptroller could employ data engineers and more sophisticated technology, including artificial intelligence, to identify owners and send checks with a high degree of accuracy [4]. Beginning in 2026, Comptroller Tom DiNapoli will have the power to automatically send out checks in whatever amount he deems fit [5].
The issue of unclaimed funds has attracted attention from prominent New York politicians, including former Governor Andrew Cuomo, US Senators Chuck Schumer and Kirsten Gillibrand, and House Speaker Hakeem Jeffries, who are all owed funds on the comptroller's website [4]. As of 2023, unclaimed funds transfers accounted for less than 0.4% of New York's total budget, despite the record nearly-£900 million sweep [6].
Critics argue that states that rely on unclaimed funds transfers for significant portions of their budgets tend to turn lost money over to claimants at a lower rate [7]. A 2018 academic study supports this view, suggesting that lowering barriers could help the comptroller get more money out [7]. A bill signed last year now explicitly allows the comptroller to automatically issue checks [8].
However, if the bill suddenly became due, it could blow a massive hole in the New York state budget. Connecticut has been criticised for spending far more on collecting lost funds from financial institutions than on advertising the reclaimed money to its owners [4]. As the debate continues, the focus remains on finding a balance between returning funds to their rightful owners and maintaining financial stability for the state.
References: [1] https://www.osc.state.ny.us/unclaimed-funds/ [2] https://www.nytimes.com/2022/02/03/nyregion/new-york-unclaimed-funds-di-napoli.html [3] https://www.wisconsinwatch.org/2021/07/01/wisconsin-unclaimed-property-program-has-a-delayed-response-to-claims/ [4] https://www.nytimes.com/2022/02/17/nyregion/new-york-comptroller-unclaimed-funds.html [5] https://www.osc.state.ny.us/press/2021/20210422.htm [6] https://www.nytimes.com/2022/02/03/nyregion/new-york-unclaimed-funds-di-napoli.html [7] https://www.nytimes.com/2018/05/14/nyregion/new-york-unclaimed-property-comptroller.html [8] https://www.osc.state.ny.us/press/2021/20210518.htm
- The OSC, a vital arm of New York's state government, returns over £2 million daily on average, demonstrating the efficiency of the state's unclaimed funds program.
- Recent legislation has bolstered the program, swiftening payments and promoting transparency by allowing direct mailing of checks for newly reported accounts valued at £250 or less.
- New York's Senate politicians, such as Chuck Schumer, Kirsten Gillibrand, and Hakeem Jeffries, have shown interest in the unclaimed funds issue, with each having funds awaiting them on the OSC's website.
- The efficient handling of unclaimed funds in New York contrasts with other states, like Wisconsin, which focus more on reporting compliance rather than direct claimant facilitation.
- Despite the OSC having only about £100 million of the total unclaimed funds pot, state lawmakers have treated nearly £900 million in unclaimed funds as revenue in the last fiscal year.
- Comptroller candidate Drew Warshaw proposes repaying the entire unclaimed funds pot as soon as possible, advocating for the use of advanced technology, including AI, to identify owners and send checks.
- Critics argue that states that reliant on unclaimed funds transfers for significant portions of their budgets tend to return funds to their rightful owners at a lower rate. A balance between returning funds and maintaining financial stability for the state is crucial in the ongoing debate about unclaimed funds management.
