Senate kills bill authorizing withholding of tax refunds

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A bill that would have authorized the state to withhold income tax refunds from Mississippians who owe debt to private hospitals and community colleges was voted down in the Senate on Wednesday.

Those who owe debts greater than $100 to nonprofit hospitals and $25 to community colleges could have had state income tax refunds withheld under the bill.

The practice is already used for uncollected four-year university and child support debts. In addition to state community colleges, the bill would have broadened the practice to include nonprofit hospitals, making them the first private entity able to draw upon state assistance to collect outstanding debts.

The bill, which failed by a close 24-23 vote, was held on a motion to reconsider on Wednesday, meaning the Senate can take another vote on the legislation on Thursday.

Gil Ford Photography

Sen. Sally Doty, R-Brookhaven

“Our hospitals are subject to federal guidelines, and laws that requires them to take in certain patients,” said Sen. Sally Doty, R-Brookhaven, who defended the bill on the Senate floor Wednesday. “I think they deserve some different treatment than just a retailer. They’re in a separate class.”

The bill in question, House Bill 687, originally included provisions only for community colleges to collect outstanding debt through withholding income tax refunds.

But Doty added the hospitals provision to the bill after a similar bill she sponsored dealing with hospitals died in committee in late January. Doty said on the floor last week that she has worked on this provision for six years.

“I’m in favor of the community colleges having this ability, but I’ve got some concern over non-public entities claiming state tax refunds,” Sen. Briggs Hopson, R-Vicksburg, said last week. “I’m concerned this may start a slippery slope for the private hospitals, and quite honestly, I wonder if this will start a pecking order of who can collect in the private sector.”

Gil Ford Photography

Sen. Briggs Hopson, R-Vicksburg

Hopson successfully introduced an amendment on Wednesday that would prioritize public hospitals’ ability to collect debt before private hospitals before the Senate voted against the bill on final passage.

Mississippians owe community colleges around $98 million in debt, according to Kell Smith, spokesman for the Mississippi Community College Board.

“We think it’d be a good tool for community colleges to collect some of the debt that’s owed to them,” Smith said.

The bill in its current form treats the community colleges differently than the hospitals.

Existing law gives four-year universities the authority to work with the Department of Revenue to determine outstanding debt, and the revenue department then withholds tax refunds when necessary. An appeals process is available for those who wish to dispute those offsets after the fact. That process would have been used by community colleges under the bill.

But the section of the bill dealing with hospitals would first require a judgment from a county’s Justice Court judge, who after a hearing could authorize the Department of Revenue to withhold an individual’s refund.

The bill was held on a motion to table last week after Sen. Michael Watson, R-Pascagoula, called into question the legality of adding the hospitals provision to the original colleges legislation.

Lt. Gov. Tate Reeves, after consulting with Senate attorneys, ruled Wednesday that Watson’s point of order was not well taken, giving Doty the green light to move forward with her defense of the bill and allowing the Senate body to vote.

Before it failed, three senators on Wednesday spoke against the bill on the floor.

“We don’t care about folks. We want what we want, and that’s not the right attitude,” said Sen. David Jordan, D-Greenwood. “We all read God’s word, and we know what it says. I don’t see any compassion in this bill for the poor.”