Some fear confusion in accessing money
State representatives said they are worried that taxpayers would have difficulty accessing their tax refunds after the Department of Revenue's decision to replace tax refund checks with debit cards. The pre-paid Chase Visa cards will be sent out to taxpayers instead of tax refund checks. Taxpayers may still request their refund in the form of direct deposit instead of receiving a card.
The cards are expected to save the Department of Revenue $315,000 next year, said Cynthia Bridges, secretary of the Department of Revenue. But members of the House Appropriations Committee said they could cause problems for taxpayers.
"This truly has created an issue from what I hear in my district and what I've heard this morning," Rep. Jim Fannin, D-Jonesboro, chairman of the committee, said Monday.
Chase, which sends out the debit cards, will not receive any money from the state as part of the program, Bridges said. Undersecretary Clarence Lymon said the company will likely be compensated for the program with the interest earned on the money while in its control.
As of March 9, about $69 million had been put into refund accounts with Chase, Bridges said. Only about $44 million of those cards had been activated.
There are also fees that will be charged to taxpayers if they use non-Chase ATMs.
Taxpayers can bring the card to a Chase bank and get their refund out through a cash advance, though they will have to know how much is on the card, Bridge said. The cards can be also used without fees at Chase ATMs or can be used at retailers, she said.
Rep. Helena Moreno, D-New Orleans, noted that residents who live in rural areas or who do not have easy access to a Chase branch would be unable to get that advance.
An online account will be set up for each card, and taxpayers can use the site to check their balance, pay bills or issue a check to themselves. Issuing a check will cost 75 cents, Bridges said.
Other lawmakers worried that residents might not know that their refunds were on the debit cards and would throw them out thinking they were an advertisement. Bridges said taxpayers can request one new card for free each year. After that, a $5 fee will be charged.
Fannin also noted that in the past, he frequently cashed refund checks for customers at his farm supply business. However, he would not be able to do that with debit cards because he would be charged fees to do so.
"I don't have to cash it, but I'll upset my customers because I've been doing it for years or I eat that charge," Fannin said.
When Bridges replied that was just an ordinary cost of doing business, Fannin said, "I don't feel that way, and I'm sure there are a lot of businesspeople who don't view it that way."
Bridges said the cards were an attempt to run the Department of Revenue more like a business and find cost savings. "If you all decide not to embark on this program, we would request that certain allowances be made to our budget."
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Jeff Adelson can be reached at jadelson@timespicayune.com or 225.342.5207.