California tax and fee bureaucracy launches $445K AI assistant to handle calls

California’s Department of Tax and Fee Administration has launched an AI-powered virtual assistant to help its call center handle taxpayer inquiries, marking one of three state-funded AI initiatives under Governor Gavin Newsom’s broader technology adoption effort. The $445,000 pilot program aims to eliminate the need to reassign workers during peak tax season when call volumes spike by over 50%, while potentially enabling the department to answer over 10,000 additional calls annually.

The big picture: California is testing generative AI across government services while navigating labor concerns and public trust issues as the technology becomes more prevalent in public sector operations.

How it works: The AI assistant from SymSoft Solutions, a Sacramento-based technology company, operates as a support tool for human agents handling taxpayer calls.

• The system transcribes conversations and removes personal information before sharing with the AI assistant
• It then identifies the customer’s question, searches relevant information, and generates a response using generative AI
• Human agents review the AI-supplied answer before providing information to customers
• Initial analysis shows the tool saves roughly 1.5% of agents’ time per call

Key details: CDTFA’s call center handles massive volume with significant seasonal fluctuations that strain resources.

• The center receives 42,000 calls monthly during regular periods, jumping over 50% during peak tax filing months
• 120 state workers answer approximately 800,000 taxpayer questions annually
• The department generates over $90 billion in revenue for California through various tax collections
• About 25% of call center agents began using the tool in late August

Labor concerns emerge: Union representatives express reservations about AI implementation and worker involvement in the process.

• “I’m not sure we have been engaged to the level that I would like to see us engaged in,” said Anica Walls, president of SEIU Local 1000, which represents CDTFA employees
• The union wants stronger safeguards ensuring workers have input on how AI tools are developed and used
• Walls emphasized that employee perspectives should be included from the beginning since they’re most familiar with the work AI is designed to assist

What they’re saying: Early user feedback suggests positive reception among call center staff.

• “It’s great to have more backup,” said Brandon Taylor, a call center employee using the tool for two weeks. “Anything we can do to get (callers) off the phone quicker is a good thing.”
• “Anything we can do to create more efficiencies is a good thing and that’s what we’re looking to do,” added Thor Dunn, the call center chief

Broader AI initiative: The call center assistant represents one piece of California’s $3.9 million investment in AI pilot programs.

• Two other initiatives run by the California Department of Transportation focus on crash analysis and traffic pattern studies
• “GenAI is here to stay, and the state is excited to learn more about GenAI’s capabilities through these projects,” said Roy Kennedy, deputy secretary of communications for the Government Operations Agency

Why this matters: The pilot demonstrates how government agencies are balancing AI adoption with workforce concerns and public trust considerations.

• “If you don’t think about human beings in the loop in the beginning, it’s going to be quite challenging to build and sustain trust,” noted Meredith Lee from UC Berkeley’s College of Computing, Data Science, and Society
• The project offers concrete data on AI’s potential impact in government services while highlighting the importance of human-centered design in public sector technology adoption