By Paige Winfield Cunningham on July 29, 2010
Virginia is paying a private firm too much for tax collections that could likely be done in-state, say members of the Treasurers’ Association of Virginia.
In fiscal year 2009, CGI collected just 15 percent of the delinquent taxes it was assigned by the state and retained nearly one-third of the collections for payment. Out of $237 million in unpaid taxes, the global company collected $37 million and held onto $11.5 million.
Hanover County Treasurer Scott Miller thinks that the hundreds of county, city and town treasurers around Virginia could achieve a better success rate.
That’s because local governments have more tools at their disposal to extract the difficult-to-collect taxes that have been overdue for years, Miller says. He’s able to issue bank and wage liens without going to court, seize vehicles and block transactions liking renewing license plates—all tools that are out of reach for private companies like CGI.
“You gotta shake people up a bit, you gotta act meaner than you are,” Miller said. “It’s some pretty powerful tools.”
Tracking down tax delinquents is a large–and potentially lucrative—task for the state. Virginia was owed nearly $2 billion in unpaid taxes as of March 31, the most recent date for which numbers were available from the Virginia Department of Taxation. Spokesperson Joel Davison said numbers updated through June 30 should be available next week.
A majority of that debt is held by individuals, not businesses. Unpaid personal income taxes including penalties and interest total $1.2 billion, while businesses owe another $761 million in income, sales and withholding taxes.
And most of the debt is old debt. About $1.4 billion has been owed for more than one year. Nearly $764 million is more than five years old.
