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Late-tax amnesty program gathers $261M for Pa. coffers
Rendell praises GOP legislator for being a 'bear' on collection
Tuesday, June 22, 2010

HARRISBURG -- At first, Gov. Ed Rendell concedes, he wasn't a big fan of offering amnesty to prompt deadbeats to pay their overdue taxes, but now that state coffers are $261 million fatter, he's glad he listened to a sophomore legislator.

It was Republican Rep. John Bear of Lancaster who pushed for the first amnesty program in 14 years, in which tax delinquents are encouraged to pay up by waiving most of the penalties and interest on the back taxes.

Mr. Rendell announced the results Monday: $261 million collected by the time the two-month program ended at midnight Friday. That's $71 million more than the state's goal of $190 million. On Thursday, $180 million had been received, so a healthy $81 million came in during the last 36 hours of the program.

"We were looking for ways to improve government efficiency and sources of revenue that weren't taxes," said Mr. Bear, a management consultant before being elected.

"We thought this was a good time to move forward with a tax amnesty program. We had a lot of taxes owed, a huge structural deficit [in the budget] and [the revenue department] was upgrading its computer systems" in a way to catch delinquents.

After expenses for advertising and administration are paid and $5 million is put into the motor vehicle fund, the amnesty program will provide $240 million to cut the state's $1.23 billion budget deficit, the governor said.

Overdue taxes were collected from 60,000 individuals and companies during the two-month amnesty program. The largest single amount was $12 million, from a company that Mr. Rendell said he couldn't name because of legal concerns.

Mr. Rendell said he initially didn't think the revenue department would be so successful, but he yielded to Mr. Bear's pleas to try it. Mr. Rendell said the state had already increased collection of back taxes from $550 million a year to $900 million a year without the lure of waiving most penalties and interest.

"I didn't think there was that much more we could collect with an amnesty program, but John Bear was right," the Democratic governor said.

The state still is owed about $2 billion in delinquent taxes, but much of that debt goes back decades and many of those who owe it are dead. But Mr. Rendell said he believed that at least $500 million could be collected, and that Revenue Department agents would go after it.

The department will increase its efforts to garnishee the wages of people who owe taxes, he said. He'll also ask the Legislature to approve an additional $2.3 million to hire 40 more collection agents for the revenue department.

And starting in August, people who have had tax liens filed against them will have their names put online; names of tax-delinquent corporations already are listed. Also, the revenue department will check to ensure that companies that must collect sales tax have the necessary tax collection license and are in fact remitting the proper amount to the state.

Bureau Chief Tom Barnes: tbarnes@post-gazette.com or 1-717-787-4254.
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First published on June 22, 2010 at 12:00 am