Next week, state lawmakers might hit the financial jackpot, potentially gaining access to over a quarter of a billion dollars to spend as they please. Interestingly, some of this money could have been yours to use as you see fit.
In 2022, family finances were severely impacted by sudden inflation. In response, state lawmakers and Governor Gavin Newsom introduced an emergency relief program.
“It’s called the Middle Class Tax Refund. It’s our way of getting money back into your pocket to help with everyday expenses,” Newsom explained in a video.
California’s Franchise Tax Board (FTB) distributed this relief by sending millions of people either a prepaid debit card or a direct deposit into their bank accounts.
Carlos Soliz, a master’s student at San Jose State University, received a $700 debit card through this program. “I thought this would help me tremendously to pay tuition,” Soliz said.
Now, a year and a half later, this relief program is winding down. However, state financial records show that hundreds of millions of dollars remain unspent, meaning many families might miss out on this aid. In fact, next week, the FTB is set to transfer over $360 million from the “Better for Families Tax Refund Fund” to the “General Fund” on June 1, allowing lawmakers to use it for other purposes.
If you think you might be entitled to some of this unclaimed money, the FTB advises checking their website for more information and to see if you’re due any funds.
Take the case of Carlos Soliz. Although he was issued $700, part of his relief money got stuck on his card, and he was unable to transfer it to his bank account. “If the government makes a promise to help the people, they should,” Soliz said. He made numerous calls over several months seeking assistance with his card but was met with constant frustration and disconnections. Without our intervention, his account might have been labeled dormant, potentially sending his money back to the state.
“That’s not acceptable,” Soliz said.
Other recipients of the Middle Class Tax Refund (MCTR) also experienced similar issues and voiced their complaints both to us and to state lawmakers.
“We got calls by the hundreds from people who could never get through on the customer assistance lines. That frustration ultimately led people to give up and throw away the card,” said State Assemblymember Gregg Hart, who chairs the Joint Legislative Audit Committee. This committee has directed an audit of the MCTR payments.
The recent audit revealed poor oversight at the Franchise Tax Board, noting that its private card contractor ignored 36% of calls seeking assistance with the debit cards. Money Network, the vendor, told NBC Bay Area that the calls were not answered for various reasons, including callers hanging up quickly.
Money Network stated, “The Middle Class Tax Refund Program was unprecedented in speed and scale.”
“The big failure was on the folks that were not able to get through to the system, and the folks now, who still have these benefits coming to them, who haven’t accessed them yet,” Assemblymember Hart said.
If you never received a payment or are unsure, it’s crucial to speak up before June 1. If you received a debit card but haven’t activated it or used all the funds, your balance is safe for now. The state holds this money in a separate account that lawmakers can’t access until 2026. If you forget, we’ll remind you in two years, but we strongly recommend using the money now.
