Millions of Californians have made hefty contributions of cash, stocks, even antique jewelry, to state coffers without knowing it. That's because lawmakers have been raiding the state's unclaimed-property cache and using the proceeds to help balance the budget.
About $896 million in unclaimed property was turned over to the state for safekeeping last year under a 46-year-old program designed to protect forgotten or abandoned assets. Less than $239 million of that was eventually claimed; most of the rest was dumped into the state's general fund.
State officials have been increasingly aggressive about taking control of the property. When the program began, property could go unclaimed for more than 15 years before it had to be turned over to California. Now, the state takes it after as little as a year.
Most unclaimed property is cash and securities; it comes from bank accounts, paychecks, utility company refunds and other sources. There are also valuables such as antique jewelry left in safe-deposit boxes.
Utilities, banks and other businesses are bound by law to give the state unclaimed property after a period that varies by type of property; they face stiff penalties if they fail to do so. Employers must surrender unclaimed employee paychecks after a year. Banks have three years to relinquish accounts and the contents of safe-deposit boxes that have been abandoned.
The state pays commissions to outside contractors to hunt down out-of-state money owed to Californians.
Many of the owners of unclaimed property would be relatively easy to find. For example, the state has absorbed $10,000 in payments issued to the Red Cross, which the organization has not claimed. Online records show that a $1,475.45 hospital payment to a David Geffen on Pacific Coast Highway in Malibu has not been claimed.
The state is holding a $64.63 Tiffany & Co. credit for a Michael Ovitz. And Los Angeles Mayor Antonio Villaraigosa has an $80 payment waiting for him from an insurance company.
They are among 7.6 million California businesses and individuals whose unclaimed property has totaled roughly $4.8 billion since the program started. The state spends $15,000 a year tracking them down. Last year, it used $630 million of their money to plug a hole in the budget.
Ron Roach, spokesman for the California Taxpayers Assn., said the system is "rigged" to keep the property in state coffers.
