Unclaimed Property Refunds Boost CT Deficit

HARTFORD (AP) — Connecticut’s top accountant said an unusual spike in the number of people collecting unclaimed properties boosted the state’s budget deficit by about $18 million.

The state faces a deficit of about $253.4 million for the fiscal year that ends June 30, 2011.

Comptroller Nancy Wyman, who is poised to take office as lieutenant governor next month, said the state typically pays between $25 million and $30 million a year in unclaimed property refunds, but the figure currently stands at more than $25 million for the first five months of the fiscal year.

The spike may be due to a poor economy that has forced many people to be more aggressive in tracking their money and to efforts to promote the unclaimed property program over the past couple of years, Wyman spokesman Steven Jensen said.

“The number of people filing for unclaimed property refunds has exploded, and the payouts are far exceeding projections,” Wyman said in a statement.

“Those refunds are offsetting relatively healthy growth of income and sales taxes, which is being driven by the addition of 8,300 jobs since the start of the calendar year,” she said.

The unclaimed properties can include stocks and bonds, uncashed checks, unclaimed dividends, wages, refunds, utility deposits, jewelry and other valuables in safety deposit boxes. Typically, these properties are declared abandoned when their owners forget about them, moves without a forwarding address, or die without informing heirs of the property.

If businesses holding the property cannot find the owners after a certain period of time, states are allowed to take possession of it in a process known as escheat.

While states are supposed to try to return abandoned property to its rightful owners, much of it remains unclaimed and stays in state coffers. This is particularly significant for Connecticut’s budget, considering its status as corporate headquarters for dozens of companies, including large financial and insurance firms.

The state had nearly $533 million in escheated property with nearly 923,000 owners listed at the end of June of this year, according to the state treasurer’s office website.