Editor's Note: We updated this story on 5/29/2024 with additional data from the state.
State lawmakers could score more than a quarter of a billion dollars to spend however they want. The thing is, some of that money might actually be yours to spend however you want.
Sudden inflation hit family finances hard in 2022. State lawmakers and Gov. Gavin Newsom responded with 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 said, explaining the program in a video.
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California’s Franchise Tax Board sent millions of people a prepaid debit card or deposited money directly into their bank accounts.
Carlos Soliz, who is getting his master’s degree at San Jose State University, welcomed the relief money. He was issued a debit card for $700.
”I thought this would help me tremendously to pay tuition,” Soliz said.
A year and a half later, part of the relief program is beginning to wind down. But state financial records NBC Bay Area reviewed show hundreds of millions of dollars left unspent -- and at risk of not benefiting any families at all. In fact, the Franchise Tax Board is set to trigger a huge transfer. On June 1, it will move $367 million out of the Better for Families Tax Refund Fund to the General Fund, where lawmakers can spend it however they want.
Of the $367 million going back to the General Fund on June 1, the Franchise Tax Board said an estimated $347 million is money originally budgeted for the program that was ultimately not needed. The FTB said the remaining $20 million comes from relief payments for around 40,000 people that the state was unable to deliver. Citing a state audit of the program, the FTB said the "predominant reason" it didn't deliver these payments was because it didn't have valid addresses for recipients.
How do you tell if you're one of those 40,000 people? If you didn't get a payment back in 2022 or aren't sure, you have a couple of options.
First, you can visit the state's Middle Class Tax Refund website. Make sure the FTB has your current address.
Option two: You can message the Franchise Tax Board using its "MyFTB" chat.
Option three: You can call Money Network, the state's vendor. Their line for automated customer support is 800-542-9332 and their line for MCTR debit card-related questions is 800-240-0223.
If you were sent a prepaid debit card, good news: The state says your money is safe until 2026, even if you have not activated the card. If you got a card and lost it, you can call Money Network to have them reissue it.
Remember Carlos Soliz? And his $700? Turns out, part of his relief money was stuck. He couldn’t transfer it all from his card to his bank.
“If the government makes a promise to help the people, they should,” Soliz said.
He called repeatedly for months, attempting to get help with the card.
“It was the same deal every day, every time: ‘Sorry to hear that, let me transfer you to the right department.’ And I got disconnected,” Soliz recalled.
He asked for our team’s help to get his full $700. Without our intervention, the state might have labeled his account dormant, and might have sent his money back to lawmakers.
“That’s not acceptable,” Soliz said.
Other people complained to us about the MCTR payments, too. And they complained to state lawmakers as well.
“We got calls by the hundreds, from people who could literally never get through on the customer assistance lines, and that frustration ultimately led people to just give up and throw away the card,” said state Assemblymember Gregg Hart, who now chairs the Joint Legislative Audit Committee, which directed the state to conduct an audit of MCTR payments.
The recent audit found lax oversight at the Franchise Tax Board, allowing its private card contractor to ignore 36% of calls to speak with an agent about the debit cards.
The vendor, Money Network, told NBC Bay Area that calls were not answered for various reasons, including callers hanging up quickly.
Money Network said in a statement, “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,” Hart said.
If you never got a payment or aren’t sure, speak up before June 1.
If you got a debit card but haven’t spent it all or activated it, your balance is safe, for now.
The state is holding that money in a different bucket -- that lawmakers can’t claw back until 2026. If you forget, it’s OK. We’ll be back in two years to remind you. But we really do recommend you use the money now.
