The South Carolina Department of Revenue has announced a plan to help make it easier for state agencies to collect delinquent fees and fines.

The department runs two collection programs. In what’s called the "setoff debt" program, the department siphons money from income tax refunds a debtor would otherwise receive. The second program is more involved, with recovery methods including garnishing wages and seizing money from bank accounts.

State agencies participating in the programs had been able to send the Revenue Department a list for collections once a year but that will increase to three times annually for setoff debt enrollees and at any time for collections through the second program.

South Carolina Gov. Nikki Haley in January told her Cabinet’s agencies to enroll in both programs. The directive came after South Carolina Inspector General Patrick Maley released a report revealing 44 agencies and colleges potentially were owed more than $1 billion in unpaid fees, fines, taxes and tuition. 

Maley recommended earlier this year that the Revenue Department lower its fees for collecting through the more intensive GEAR (Government Enterprise Accounts Receivable). A 28.5% collection fee, deducted from the owed amount, helped explain why it was seldom used, he said. The Revenue Department has since reduced the fee to 22%. The flat, per-collection fee for money recovered through setoff debt was unchanged at $25, charged to the debtor.

South Carolina’s Ethics Commission, which already was enrolled in both collection programs, announced it is eager to take advantage of the upgrades, according to Ashley Thomas, spokesperson for the Revenue Department. The Ethics Commission’s current debtors’  list shows former candidates, lobbyists and officeholders who owe more than $3 million in fines and penalties levied since 1999. A large portion of those delinquencies stem from late filings of campaign disclosure reports and many people on the list are still involved in an appeals process or are working with the commission on a payment plan, said Ethics Commission Director Herb Hayden. Other newly announced improvements to the collection programs include four more employees dedicated to collection efforts and a streamlined enrollment process allowing agencies to enroll in both programs using the same application. The Revenue Department hopes to have a total of 18 collectors. The Revenue Department recovered $136 million through setoff debt collections last year and $144 million in the first eight months of this year. Through the second program, the department collected $20 million last year and $17 million through the first eight months of this year.


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