What should be done about the state Board of Equalization in response to the report that the tax agency misused revenue-generating staff and misallocated some sales tax revenue among different funds? Equally important, what shouldn’t be done?
The Legislature is poised to act and faces two options: Reform the agency as part of the usual policymaking process, with public hearings, or jam changes through the state budget process, without input from small business owners, consumers or others who will be most impacted.
Unfortunately, the latter approach seems to have support from key policymakers. Their goal appears to be to make drastic changes to the BOE – far beyond those needed to address the problems identified by the state’s evaluation – and spring the changes on rank-and-file legislators and the public at the last minute, roughly 72 hours before a vote.
The Legislature has two options: Reform the tax board as part of the usual, public process or jam changes through in the state budget. We prefer the more thoughtful approach.
To accomplish this, the changes would be included in the state budget process, even though BOE reform is not truly a budget matter.
As the oldest and largest group representing taxpayers in the state, the California Taxpayers Association is calling for a more thoughtful approach. The BOE clearly needs to change the way it operates, but the changes must be made with full transparency.
Assemblyman Sebastian Ridley-Thomas, who chairs the Assembly Revenue and Taxation Committee, has introduced reform legislation (Assembly Bill 1210) that takes the right approach. His bill outlines a framework for reforms to address problems identified in the Department of Finance’s evaluation while preserving core functions that protect taxpayers’ rights.
For example, we must safeguard the Taxpayers’ Bill of Rights, which itself is a 1988 reform that could be rolled back if the current reform effort isn’t carefully undertaken.
It also is worth noting that the BOE collects approximately one-third of the state’s annual tax revenue, has more than 4,000 employees and is responsible for such things as hearing tax appeals (in a setting that doesn’t require lawyers, and is accessible to taxpayers of all income levels) and making sure retailers don’t overcharge customers for sales tax.
Changes to an agency this important – to the state and taxpayers alike – should be made only after a thorough vetting, and should not be part of the notoriously hasty and politically charged budget process.
Yes, the state can and must improve transparency at the BOE. But transparency is never improved through backroom deal-making.
Teresa Casazza is the president and chief executive officer of the California Taxpayers Association. She can be reached at firstname.lastname@example.org.