We have said many times that the state Board of Equalization should be sent to the scrap heap.
We did so most recently in 2010, when Bloomberg BNA’s Daily Tax Report detailed how elected members of the Board of Equalization had a pattern of deciding complex cases in favor of certain campaign contributors.
Former board member Bill Leonard was quoted in the investigative series saying that after he cast votes helping taxpayers: “I’d get cookies, I’d get flowers, I’d get campaign checks.”
We wish that the Board of Equalization had cleaned up its act over the last seven years. It hasn’t, and that’s why we renew our call for California to get rid of this anachronistic vestige of the 19th century.
Moreover, the board completed its original mission – equalizing taxes among counties – long ago.
The Board of Equalization serves as a politician’s sinecure. Four board members won seats after they were termed out of the Legislature. It’s also a swamp. Too often, corporations seeking multimillion-dollar breaks on their taxes find ways to slip money into board members’ coffers and evade restrictions on campaign donations.
We return to the slimy subject of the Board of Equalization because a Department of Finance audit, detailed recently by The Sacramento Bee’s Adam Ashton, found that the board is unable to explain how it misallocated tens of millions of dollars in tax revenue.
Remember: This is a board that is supposed to be staffed by green-eyeshade types who understand math and guard our tax money.
In the 1990s, Gov. Pete Wilson, facing budget deficits, sought to merge the board with the Franchise Tax Board. Gov. Arnold Schwarzenegger took office in 2003 promising to blow up the boxes, and took aim at the tax boards. And yet the Board of Equalization survives because many legislators, thinking about the next election, hesitate to abolish an office that pays $142,577 a year.
In the board’s defense, no current member faces criminal charges. But the Department of Finance audit found that board members Jerome Horton, a Los Angeles-area Democrat, and Diane Harkey, an Orange County Republican, misused staff members. Horton and Harkey denounce the audit.
Horton has been down this crooked path before. The Sacramento Bee reported last year that he used $118,000 in tax money to decorate his Sacramento office with designer furniture.
Board of Equalization member Fiona Ma, a San Francisco Democrat who smartly is distancing herself from the mess, is urging Gov. Jerry Brown to appoint a trustee to manage the Board of Equalization.
State Controller Betty Yee, who by virtue of her office is the fifth board member, wants the Board of Equalization’s responsibilities reduced to presiding over property tax appeals and a few other duties. Her proposal would strip it of virtually all other authority it has accumulated over the decades, cutting its oversight of sales taxes, use taxes and more than 30 other revenue-generating programs.
Brown and the Legislature would have no shortage of suggestions for how to restructure the board, if they chose to engage in the effort. But experts have been offering restructuring suggestions for decades. And little, if anything, has changed for the better.
The Board of Equalization simply needs to disappear.