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As Lawrence McQuillan notes in California Dreaming: Lessons on How to Resolve America’s Public Pension Crisis, outlandish pensions for government employees have put state budgets in crisis and threaten the services taxpayers receive. In California, government employees could retire at age 55 with two percent of their salary for each year of state employment. In September of 2012, governor Jerry brown signed a bill extending the age to 63, a weak attempt at reform but better than nothing. Even so, California’s Board of Equalization bosses worked against it.
The BOE’s Jerome Horton wanted the agency, which already had more than 4,000 on staff, to hire as many new government employees as possible before the reform kicked in on January 1, 2013. The new hires were supposedly to staff a call center in Culver City that turned out to have an existential problem, so the new staff were sent on temporary assignments. This was hardly the first example of BOE indifference to taxpayers.
As we noted, the BOE misallocated $47.8 million in retail sales tax to the state’s general fund. BOE bosses spend taxpayer dollars on events to promote themselves and dish out raises to high-level management without performance reviews. The BOE headquarters in Sacramento has earned a reputation as a “bottomless money pit.” It was purchased from CalPERS for $80.7 million in 2007, remains plagued with falling glass, toxic substances and other defects that have cost $60 million. And the place is also a hive of nepotism.
It recently emerged that more than 800 the 4,200 BOE employees have relatives on BOE staff. So they were hired not because of merit or competence but because some relative pulled the strings to get them on board. In all likelihood, most if not all were unqualified and/or incompetent. This whole cozy gang will soon be transferred to a new revenue agency that reports to the office of governor Jerry Brown, a born-again tax hiker and prolific spender. So taxpayers should expect more corruption, more incompetence, and less accountability going forward.