A new law that quietly sailed through the Legislature and was signed by Gov. Phil Bryant without fanfare could give county and city coffers a boost by taking money from scofflaws’ state tax returns to pay off debts.
A bill introduced in the House called “The Local Government Debt Collection Setoff Act” authorizes county and city governments to grab a debtor’s state tax return before the check is cut by the state Department of Revenue to satisfy debts that have proved to be uncollectable. The law also allows the department to increase the debt by 25% as a “collection assistance fee.”
“A lot of municipalities and small towns and counties are going broke because of debts owed them,” Sen. David Jordan said.
Leflore County could choose to use the law to collect on the $1.3 million owed in garbage collection fees, some of which are overdue by more than 20 years. The City of Greenwood could use the same law to receive the $2.8 million in unpaid fines assessed to misdemeanor offenders.
Without the ability to do anything beyond putting a hold on scofflaws’ car tags, the county has struggled with collecting these debts, owed by two of every three garbage service customers. Health laws require the county to continue to collect the garbage. And people appear to have figured out how to get license plate stickers for their cars without paying for garbage service.
A recent amnesty held by the city to encourage people to pay off the misdemeanor fines brought in only $11,842, less than one-half of 1% of the amount owed, leaving officials to say scofflaws know the city can’t do much else to get them to pay up.
“It’s much needed because we all have to pay our bills, or make an effort,” said District 3 Supervisor Anjuan Brown. He said the county realizes some people listed as owing fees may be dead or could be people who are unemployed and unable to pay.
“But it should put a dent in it,” he said. “It’s a good start, and hopefully we can start collecting some of this money.”
Greenwood Mayor Carolyn McAdams was also encouraged by the new law.
“This will enable us to get our funds back immediately,” she said. Describing the debt owed the city as “a tremendous amount of money,” McAdams said. “I hate it for these people (whose tax returns will be reduced to cover their fines), but that’s where we’re at.”
The mayor said she was encouraged that the Legislature recognized this was a problem for cities and counties across the state and did something to address it.
“We’ve got two or three tools now we can use to get these fines back on the books,” McAdams said
The law requires the county or city notify the debtor of its intent to have the debt paid by income tax return and that the procedure would increase the debt by 25%. This gives the debtor 30 days to either pay the debt before the increase would kick in or appeal the decision to a person appointed by the county or city.
If the debtor doesn’t respond or the hearing determines the person should pay the amount owed, then the paperwork is submitted through the Mississippi Association of Supervisors for the county or the Mississippi Municipal League for the city.
If the amount owed is more than $50 and the person owing the debt is entitled to a refund of at least $50, the state withholds the amount of the debt plus 25%. The amount owed is refunded to the county or city, the state keeps 5%, and the Supervisors Association or the Municipal League gets the other 20%.
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