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State of Oregon Budget Hurting Due to Unpaid Taxes

smallbudget

smallbudget

The State of Oregon, which relies heavily on income taxes to help balance the state budget, is hurting due to an estimated $1.25 billion in unpaid taxes.  This amount of unpaid taxes accounts for roughly an 18.5% failure rate on the collection of state income taxes.

 

Old Technology and Inefficient Systems to Blame

 

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old-server

old-computer

old-computer

An audit released in August 2010 performed by the Secretary of State’s office found that around 66,000 people had filed federal tax returns but neglected to file their state taxes without getting caught.  In the audit, the Secretary of State criticized the Oregon Department of Revenue for relying on ““cumbersome and limited” technology, missing opportunities due to non-comprehensive systems, and failing to act in a timely manner”.  The current technology systems in place consist of roughly 70-80 big systems and 220-250 little systems that have been developed to meet needs over time without any particular strategy.  The accounting system is the oldest and was developed in the late 1980’s.

 

Current and Future Improvements Proposed for Technology Systems

 

An employee at the Department of Revenue stated that to help address the issues found in the audit they have set firm deadlines for contacting taxpayers, set up a phone system to avoid “phone tag”, increased the amount of employees who work in the collections department, increased information sharing with other state agencies, and worked with other companies that specialize in financial data.  The state authorized the hiring of 35 new staff members two years ago to concentrate on collections.  This group alone has helped to bring in $38.5 million in outstanding revenue to the state.

 

The Oregon Department of Revenue recently prepared a request for proposal (RFP) in order to find potential companies to revamp their currently outdated systems.  Over the next three to five years, at an approximate cost of $100 million, they plan on implementing a new system that would “see a huge increase in productivity and pay for itself pretty quickly”.  They know they can’t continue to do things the same as they have been.

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