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Tax Agency Deserves a Stop on California “Corruptour”

Monday March 27th, 2017   •   Posted by K. Lloyd Billingsley at 9:04am PDT   •  

With the April deadline looming, taxpayers might ponder the prospects of filing a return in which they fail to account for millions of dollars. As it happens, that is the case with a California tax agency. According to Board of Equalization member Betty Yee, who is now state controller, the BOE misallocated $47.8 million in retail sales tax to the state’s general fund. The BOE now awaits a new audit from the state department of finance, but some of the details have already emerged in news reports.

The BOE still cannot account for the misallocation of tens of millions in tax revenue but it seems some BOE bosses have been spending public funds on events described as “education and outreach.” The BOE boasts more than 4,000 employees and its “external affairs department” deploys staff all over the state, supposedly to promote tax policy and increase public awareness. Last year the BOE member Diane Harkey sponsored a “connecting women to power” conference that cost $189,000 and included sessions such as “desk yoga,” not exactly related to taxes. In similar style, BOE member Jerome Horton has reassigned state employees to work for him and staged events not in line with the agency’s mission. As we noted, BOE members have used public funds to promote themselves and dished out raises to high-level management without performance reviews.

By any standard, the BOE deserves a spot on a California “Corruptour” modeled on one in Mexico City. Trouble is, the BOE headquarters in Sacramento, purchased from CalPERS for $80.7 million in 2007, remains plagued with falling glass, toxic substances and other defects that have cost $60 million. The building has earned a reputation as the “Terror Tower” and “bottomless money pit.” So if taxpayers swing by they should wear their hard hats and ponder this reality.

Like other stops on the Corruptour such as the Coastal Commission and the state stem cell agency, the BOE is not necessary. As veteran Sacramento observer Dan Walters explains, “real reform would be to abolish the board entirely” and fold it into a single Department of Revenue. This won’t happen “because it would mean abolishing offices that legislators themselves yearn to fill.” At the BOE they never “equalize” anything but they always waste taxpayers’ money.

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March 2017