Capitol Alert

BOE member wants to curb troubled California tax agency’s mega-conferences

A member of the California tax board that’s under fire for its alleged misuse of staff and money on Friday called for a complete halt to the extravagant taxpayer outreach events that caught the attention of investigators in a recent audit.

Board of Equalization member George Runner wants his colleagues to take up his proposal later this month. It would block them from sponsoring large conferences until the board adopts a new, formal policy governing its outreach strategy.

Runner’s office released the proposal to The Bee a day after Gov. Jerry Brown requested a state Department of Justice investigation into the tax board and placed sanctions on its ability to spend money. Runner, who was traveling Friday and unavailable for comment, has said he’d prefer that the board address the audit’s findings on its own without ceding authority to the Legislature.

The audit that prompted Brown’s order revealed elected members on the Board of Equalization steering more money to promotional events that have a “limited nexus” to the agency’s tax-collecting responsibility, temporarily assigning civil servants to their pet projects for unclear reasons, and hosting eye-grabbing conferences featuring motivational speakers who attract hundreds of people.

Last year, for instance, the board spent $189,000 on two “connecting women to power events.” In November, 113 Board of Equalization employees attended one of them, with some state workers pulling “parking-lot” duty for guests, according to the audit.

Board members Jerome Horton and Diane Harkey have favored the large conferences, which they say enable the agency to distribute information to business owners efficiently in their densely populated Southern California districts.

The agency has developed legal opinions over the years that sanction the events, although some of its executives at an Assembly hearing last week acknowledged that the Board of Equalization had “lost control” of them.

“As things sort of evolve into something bigger than was originally anticipated, we recognize that its use of resources may be beyond what’s appropriate,” Brenda Fleming, the agency’s chief deputy director, told lawmakers last week.

Runner’s proposal would require board members to consult each other and seek approval from the agency’s executive staff before requesting more than five Board of Equalization volunteers for events. In addition, it would establish a process for board members to vet their promotional materials more consistently with the agency’s professional staff.

Yet it would not stop board members from participating in smaller taxpayer education events. The agency frequently sponsors events that attract a few dozen business owners with questions about tax policies.

Since December, the board has been adopting policies to rein in some of its outreach events. One reform restricted the agency’s ability to sponsor events where low-income families can receive free assistance in filing their taxes.

Personal income taxes are not the responsibility of the Board of Equalization, although the agency can hear appeals from those taxpayers.

In March, the board for the first time adopted an outreach budget for each of its elected members. According to the audit, the agency’s spending on those activities has tripled to almost $3 million in recent years.

Despite the policies, the agency’s event planning has not changed. Horton, for example, advertised 14 special income tax preparation events this spring, and regularly opened the doors at four Board of Equalization offices in his district for people seeking help with income taxes over the past three months.

Horton’s Board of Equalization website also shows that he’s moving forward with plans for a “connecting women to power” event in June.

The events have drawn lawmakers’ attention because of their high cost, and because advertising for both the tax-preparation events and “connecting women to power” tends to feature Horton in a manner that can appear political. Board of Equalization executives last week faced tough questions from lawmakers about that advertising.

Runner wants the board to consider his proposals at its April 25 meeting in Culver City. The board is scheduled to meet on Monday in closed session to discuss potential litigation and personnel matters.

Adam Ashton: 916-321-1063, @Adam_Ashton

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