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|Your Money and Your Health
by K. Lloyd Billingsley 10/16/07
California Senate Bill 840 is still on the table, an indication that some legislators want the government to take over health care. The premise for such a plan seems to be that the government cares deeply about the welfare of individual Californians. Those inclined to share that view might survey the way the state deals with Californians' money. In some cases the state just takes it, and the victims don't even know.
K. Lloyd Billingsley
[Courtesty of Pacific Research Institute]
Lloyd Billingsley is Editorial Director for the Pacific
Research Institute and has been widely published
on topics including on popular culture, defense policy,
education reform, and many other current policy issues.
[go to Billingsley index]
"California law," explains a recent Sacramento Bee article by Jim Sanders, "requires banks, insurance companies and other firms to transfer to the state the contents of safe deposit boxes and money from uncashed stock dividends, cashier's checks, bank accounts, escrow funds or other assets that have been dormant for three years or more."
This is not a recent practice. It began nearly 50 years ago, in 1959, when Edmund Gerald "Pat" Brown, father of current Attorney General Jerry Brown, served as governor. Banks enjoyed immunity for handing the assets of their customers to the state, but they could be penalized for not doing so.
The original "dormant" period was 15 years, later conveniently reduced to five and now shaved to only three years. In other words, as the Orange County Register noted, no deposits or withdrawals for three years makes an account eligible for transfer to the Bureau of Unclaimed Property in the office of the state Controller. The state eliminated interest payments to the owners in 1983 and a recent measure by Sen. Mike Machado to pay owners interest on their seized assets got dumped before attaining a vote.
By Mr. Sanders' count there are now 8.7 million accounts with a total of $5.3 billion in other people's money and assets. As he observed, "the state gains financially by pooling the funds – including revenue from selling stocks – and pocketing millions in annual earnings."
The state, in effect, acts like Hedly Lamarr in Blazing Saddles, who lamented that one thing stood between him and the property he wanted to grab – "the rightful owners." California government is not in a hurry to notify the rightful owners. These now include more than 20 state legislators, rather easy to find, and even some state agencies. But getting one's own money back is not an easy process.
According to the Bee report, until passage of SB 86 this year, prompted by a court injunction, the law restricted the controller from contacting the rightful owners in less than 20 percent of the accounts. Even after the reforms, as the Orange County Register noted, legislators are still expecting hundreds of millions of dollars to flow into the general fund. As in the beginning, the seizures remain a substantial revenue source, in a state where spending is out of control. The controller will supposedly step up efforts to contact those rightful owners, but the seizures should be halted altogether as a matter of basic justice.
The seizures "clearly didn't put people's priorities first," State Controller John Chiang told the Bee. "How could we be holding onto properties that don't belong to the state and can be valuable heirlooms or needed cash to families?"
Very easily, the record would suggest. In a key question of money, the people's priorities came a distant second, or worse. It seems the state does not, after all, care deeply about the welfare of individual Californians.
That is why allowing the state to seize a monopoly on health care, effectively removing people's private options, is not a good idea. If the money grab fails to convince, Californians can always check out the long lines and general confusion at the Department of Motor Vehicles. CRO
2007 Pacific Research Institute