Oklahoma Saves $500,000 by Switching from Paper to Plastic

OKLAHOMA CITY, OK -- Oklahoma saves half a million dollars just by switching from paper checks to debit cards for tax refunds.

It's a huge savings for the Oklahoma Tax Commission, but not everyone is happy about the change.

"I want my money. I don't want a debit card," said taxpayer, Dianne Hunter.

Some taxpayers say they still prefer a paper check.

"Just to blanket a debit card to everybody, that's not something that works for me,"  said Hunter.

Paula Ross with the Tax Commission says Oklahomans have the option to receive tax refunds as either a debit card or direct deposit.

"If you file your income tax return and you don't choose to receive a debit card, you can have direct deposit," said Ross.

Ross says the number of people who choose direct deposit is up from 52% to 71% this year.

The savings to the tax commission comes from postage. Ross says the debit card company will pay the postage to send a card. The company makes their money from vendors. Anytime someone uses the debit card to make a purchase, the company charges a vendor fee to the business.

"There were people concerned about the fees and we're trying to get information out. If you get a debit card and you don't want to utilize it by going to all the merchants and using it, you can go to any Mastercard bank and they will cash it free of charge," said Ross.

The Oklahoma Tax Commission is just one government agency that is benefiting financially from the switch from paper to plastic. In addition to tax refunds, government agencies are also using debit cards for unemployment and welfare payments and food stamp programs. The savings from those services have not yet been calculated for the past year.

The switch to debit cards is just one part of a larger plan to modernize government. State Representative Jason Murphey says the $500,000 the tax commission saved is a drop in the bucket compared to other reforms.

"Around $60 million of savings have already been incurred. Those are year over year savings where that $60 million would've just been spent," said Murphey.

Murphey says the $60 million savings comes from three separate reforms: $40 million/year savings from consolidation of IT's infrastructure, $14 million/year savings from better centralized purchasing processes, and $6 million/year savings from consolidation of central service government agencies.
Oklahoma Saves $500,000 by Switching from Paper to Plastic

Posted: Tuesday, September 11 2012, 09:28 PM CDT