State Controller Betty Yee Suspends Local and State Government Debt Collection

Categories: Homepage, News

Updated April 21, 2020:

On Friday, March 27th, State Controller Betty Yee took an important step to protect low-income Californians when she suspended all actions by the Franchise Tax Board (FTB) to collect on debts imposed by state and local governments.  The debts at issue in this action include fines and fees imposed by juvenile and criminal courts, as well as debts owed for parking tickets, welfare overpayments, tuition, and other government-imposed fees.

A coalition of advocacy organizations, including Bay Area Legal Aid, has been working to address government debt collection, and applauds the Controller’s swift action as an act of responsive and responsible public service at a time when such actions matter most.

During the crisis, the FTB will stop garnishing wages, levying bank accounts, and intercepting other income and tax refunds, including the Earned Income Tax Credit—a critical poverty-fighting measure that builds up family reserves and promotes economic stability.

BayLegal represents many low-income clients who are deeply, adversely impacted by these forms of government debt collection even under “normal” circumstances. Many low-income clients struggle to pay for basic necessities because they are burdened with large debts owed to public entities, such as:

  • Parents assessed thousands of dollars in debts when their children are arrested for minor juvenile offenses.
  • Formerly incarcerated people who leave prison to a mountain of debt from criminal court fines and fees.
  • Public benefits and food stamp recipients who inadvertently receive benefits overpayments due to errors by local welfare departments — which then demand that the recipients repay the amounts and threaten to terminate ongoing assistance if they cannot repay.

“These fines, fees, and debts disproportionately affect low-income communities, particularly low-income communities of color,” says BayLegal Director of Litigation, Rebekah Evenson “These debts increase economic insecurity among individuals and families who in many cases already face severe barriers to basic income, housing, healthcare access and other needs.”

COVID-19 adds a dimension of public health urgency to the existing threats posed by government debt collection.  The FTB’s measures enacted last Friday are vital to help mitigate the impact of a deepening economic crisis.  

For further detail on government debt collections suspended by this action, please consult the attached flier, and contact the individuals listed on the flier.