COLUMBIA, S.C. — Debtors beware: The Department of Revenue is making it easier for state agencies to collect the fines and fees they’re owed.
An initiative announced Thursday with the state Ethics Commission is part of Revenue’s overall improvements to its two debt-collection programs, available to all agencies and local governments. The ethics enforcement agency, already enrolled in both, was eager to take advantage of the upgrades, said Revenue spokeswoman Ashley Thomas.
“The department will use all available methods to hold ethics violators responsible for unpaid debts,” said Revenue Director Rick Reames. The joint effort “makes government more accountable to the public.”
The Ethics Commission’s latest debtors’ list shows officeholders, former candidates and lobbyists owe more than $3 million on fines and penalties levied since 1999.
Much of that stems from late filings of campaign disclosure reports. Many people on the list are either still going through an appeals process or are working with the agency on a payment plan, said Ethics Commission Director Herb Hayden.
“If we can collect, we’d rather continue our own efforts. But those debts that are obviously bad debts that we’ve exhausted our efforts to collect will be sent to them,” since Revenue has greater authority, he said.
In the “setoff debt” program, Revenue siphons money from income tax refunds the debtor would otherwise get. The other program is more extensive, with recovery methods that include garnishing people’s wages and seizing money from bank accounts.
Participating agencies had been able to send Revenue a list for collection just once a year. That’s increased to three times annually for “setoff debt” enrollees and at any time for collections through the other program.
“Once we determine a bad debt, we’ll be able to send it over,” rather than waiting until December, Hayden said.
In January, Gov. Nikki Haley directed her Cabinet agencies to enroll in both programs, if they hadn’t already. Her directive came after state Inspector General Patrick Maley released a report showing 44 agencies and colleges were potentially owed more than $1 billion in unpaid fees, fines, taxes and tuition. He cautioned, however, that the tally was flawed, due to agencies’ different reporting methods.
Maley recommended then that Revenue better market both programs and lower its fees for collecting through the more intensive GEAR (Government Enterprise Accounts Receivable). Its 28.5 percent collection fee, deducted from the owed amount, helps explain why it’s not used, he said.
Revenue has reduced that fee to 22 percent.
The flat, per-collection fee for money recovered through “setoff debt” remains unchanged at $25, charged to the debtor.
Other improvements include four additional employees dedicated to collection efforts and a streamlined enrollment process. Agencies can now enroll in both programs using the same application. Revenue is working to hire two additional collectors, which would bring the total to 18, Thomas said.
Revenue officials are in the process of meeting with officials to promote the changes, she said.
According to the agency, it recovered $136 million through “setoff debt” collections and $20 million through the broader program last year. That compares to $144 million and $17 million, respectively, in the first eight months of 2015.