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The Senate delayed a bill Thursday that would allow the state to withhold income tax refunds from Mississippians who owe debt to private hospitals and community colleges.

Those who owe debts greater than $100 to nonprofit hospitals and $25 to community colleges could have tax refunds withheld.

The practice is already used for uncollected four-year university and child support debts, but if the bill passes, nonprofit hospitals would be the first private entity able to draw state assistance to collect outstanding debts.

“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,” said Sen. Briggs Hopson, R-Vicksburg. “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 private sector.”

The bill in question, House Bill 687, originally included provisions only for community colleges to collect outstanding debt. That bill would add community colleges to existing law that allows four-year universities to collect unpaid debts through the tax refund offsets.

But Sen. Sally Doty, R-Brookhaven, 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 Thursday she has worked on this provision for six years.

“These hospitals have responsibilities to take in patients under federal guidelines,” Doty said Thursday. “Our nonprofit hospitals certainly need this help. My local hospital (King’s Daughters Medical Center in Brookhaven) has around $12 million in uncollected debt. And other states allow this procedure, like South Carolina. This bill would give our hospitals a little extra revenue when times are tight.”

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 had to pass through two Senate committees – Finance and Public Health – on Tuesday to stay alive. Senators debated the bill in the Finance committee for about 15 minutes, and it was rushed through the Public Health committee with no debate hours before the 8 p.m. deadline.

“I have serious misgivings about allowing hospitals to collect someone’s income tax returns,” Sen. Hob Bryan, D-Amory, said in the Finance committee. “If what we’re trying to do is help the hospitals who are struggling financially, then I would offer an amendment to expand Medicaid.”

Sen. Barbara Blackmon, D-Canton Credit: Mississippi Senate

Sen. Barbara Blackmon, in the Senate Finance committee, successfully introduced an amendment that would prioritize child support collections before community college and hospital collections if more than one debt is owed by an indicvidual.

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.

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.

After about 15 minutes of debate on the Senate floor Thursday, Sen. Michael Watson, R-Pascagoula, submitted a point of order, or a legal challenge. Watson argued that the hospitals provision of the bill did not directly correlate with the existing code sections dealing with the universities.

After Senate attorneys discussed the point of order for several minutes during a recess, Doty made a motion to lay the bill on the table subject to call, which means the bill can be brought forward again at the will of the leadership.

The deadline for handling all general bills is next Wednesday.


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Adam Ganucheau, as Mississippi Today's editor-in-chief, oversees the newsroom and works with the editorial team to fulfill our mission of producing high-quality journalism in the public interest. Adam has covered politics and state government for Mississippi Today since February 2016. A native of Hazlehurst, Adam has worked as a staff reporter for AL.com, The Birmingham News and The Clarion-Ledger and his work has appeared in The New York Times, The Washington Post and Atlanta Journal-Constitution. Adam earned his bachelor’s in journalism from the University of Mississippi.