exploring the future of court collections “public & private sector approaches” jim lehman...
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EXPLORING THE FUTURE OF COURT COLLECTIONS
“Public & Private Sector Approaches”Jim Lehman
Texas Office of Court Administration
2
Texas Office of Court Texas Office of Court AdministrationAdministration
State Agency Created in 1977 Chief Justice - Texas Supreme Court Provides Administrative & Technical
Support Serves Approximately 2,600 Courts
in the State (512) 463-1625
Four-Part PresentationFour-Part PresentationThe Concept of ChangeGeneral Attitudes About Court Collections The Importance of Court CollectionsThe Real Issue
““In Order to Grow We Must Make In Order to Grow We Must Make A Conscious Decision to A Conscious Decision to
CHANGECHANGE!”!”
““Change is often not easily Change is often not easily embraced but is almost always embraced but is almost always
inevitable.”inevitable.” ATTITUDEATTITUDE KNOWLEDGEKNOWLEDGE TIMETIME HAM FACTORHAM FACTOR
General Attitudes About Court General Attitudes About Court CollectionsCollections
Court Philosophy
“These people can’t pay and it’s not my job.”
Community Perception
“They don’t expect us to pay and nobody cares.”
Government
“We don’t have the time or money to invest.”
COMMON COMMON SIDE-EFFECTSSIDE-EFFECTS
Presumption - “Can’t Pay” Randomly Set Terms Weak Follow-Up Warrant As Solution Credit/Recycle
Low Priority - Expectations Perception - Inconsistent High Default Rate Expensive Often Ineffective Expensive & Ineffective
Case Study No.#1
State of Texas vs Joe Truitt
Joe Truitt and his wife Jodie shared a textbook history of domestic violence: black eyes, broken bones, and broken promises. Joe already had served three years probation for pulling a gun on his older sister. He had spent time in jail for two misdemeanor assaults against his wife, and another two cases were pending. Once, in a fit of rage, Jodie says, he pushed her from a speeding car.
Joe has pled guilty to a third assault charge. He broke Jodie’s jaw. The maximum fine is $10,000.00.
1. As the judge, would you impose the maximum fine?
2. If the maximum fine is imposed, can Joe pay it?
3. If less than the maximum is imposed, why?
QUESTIONS:QUESTIONS:
•Out-of-Towner (say…California)
•3rd Grade Ed
•Age: 65-70
•Unemployed
•Lives w/Relatives
•Owes $5K
Case Study No. 2
Criminals & CrimeCriminals & Crime
CRIMINAL 1 : one who has committed a crime
CRIME 1 : an act or the commission of an act that is forbidden or the omission of a duty that is commanded by a public law and that makes the offender liable to punishment by that law.
CriminalsCriminals There are approximately 1.3 Million (or less than ½
of 1% of the national population) adult prison inmates in the U.S.
In 2003 (latest year with available data) there were 20.5 Million new criminal cases filed in U.S.
59% of all prison inmates have a high school diploma or equivalent.
Two-thirds of all prison inmates were employed the month before they were arrested for their current offense.
Bureau of Justice Statistics
Show Me The Money!Show Me The Money!
American Collectors Association
Housing………………….28%Housing………………….28%
Transportation…………...24%Transportation…………...24%
Food……………………..19%Food……………………..19%
Clothing…………………..5%Clothing…………………..5%
Medical…………………...5%Medical…………………...5%
Insurance………………….5%Insurance………………….5%
Other/Discretionary………14%Other/Discretionary………14%
Discretionary DollarsDiscretionary Dollars
It is estimated U.S. courts assessed approximately $18.3 billion in court costs, fees, and fines in 2005 or about $65 for every person in the Nation.
In 2005, gross lottery ticket sales reported for the United States was approximately $52 billion or about $187 for every person in the Nation.
Discretionary DollarsDiscretionary Dollars It is estimated that in FY 2005, the average per
case assessment for Texas courts was approximately $173.
A study of state lotteries found that lottery players with incomes below $10,000 spend an estimated $597 per year playing the lottery.
The same study found that lottery players with incomes between $50,000 and $100,000 spend an estimated $225 per year playing the lottery.
NASPL
Analyzing the ProblemAnalyzing the Problem
Denial of the IssueDenial of Responsibility/OwnershipBelief that There is No Solution
Embedded Barriers
“Historically there has never been an accounts receivable mechanism in place in the judicial process.”
Practical Diagnosis
Principals of UnderstandingPrincipals of Understanding A fine is punishment and not a “BILL”.
The payment is the defendants responsibility.
It is expected that the defendant must sacrifice to pay.
The defendant must give payment the highest priority.
The defendant must expect consequences if payment is not made.
The defendant needs to understand the consequences.
The payment is a Court Order, a sentence which may not be convenient.
A court is not where people prefer to spend money.But, many people come to court with money.
Private Sector CharacteristicsPrivate Sector Characteristics
Purpose well-definedClear line of responsibility/accountabilitySignificant investment in quality staffingSignificant investment in strategy/planningCreativity is encouraged
““Every Day A Debt Remains Every Day A Debt Remains Uncollected the Likelihood It Will Uncollected the Likelihood It Will Remain Uncollected Increases.”Remain Uncollected Increases.”
0
10
20
30
40
50
60
70
80
90
100
0 29 Days 30 Days 60 Days 90 Days 6 Months 9 Months 12 Months 24 Months
DEVALUATION – DEVALUATION – “The Incredible “The Incredible
Shrinking Dollars.”Shrinking Dollars.”
0102030405060708090
100
Current 120 Days 270 Day
Private Sector Private Sector Account ManagementAccount Management
Current - 30 Days 31 - 60 Days 61 - 120 Days 120 Days Plus
85% Collected 10% Collected 3% Collected 2% Collected -
Charge Off/Write Off
Public Sector CharacteristicsPublic Sector Characteristics
Purpose often generic, general, & broadLines of responsibility/accountability often
vague and/or overlappingStaffing often limited by resources &
politicsStrategy/planning often short range & stop
gapMaintaining the status quo is the norm
Court Case ManagementCourt Case Management
Current - 60 Days 60 - 180 Days 180 Days plus
25 % Collected 65 % Collected - Warrant 10 % Collected
GREATEST SIMILARITY:
“Both provide goods and services.”
GREATEST DIFFERENCE:
“One is driven by profit, one is driven by politics.”
Court’s CollectorsCourt’s Collectors
Court AdministratorsCourt ClerksProbation OfficersPre-trial StaffMarshalsSheriffsConstablesWarrant OfficersBailiffsWhoever
The Impact of Unpaid FinesThe Impact of Unpaid Fines
Loss of Public Revenues Decrease In Services Increase in Taxes Weaker Government