Dan Walters

It’s time to abolish California’s dysfunctional tax board

The most recent revelations about self-serving hijinks of politicians on the state Board of Equalization, such as commandeering civil service workers for political chores, have a depressing familiarity.

The once-obscure tax collection and oversight agency has become steadily more politicized, with the board’s four directly elected seats treated as either well-paid sinecures or stepping stones to higher office.

The current revelations, such as spending lavishly on personal offices, misusing civil service workers and interfering with pending tax cases, are distillations of what has been happening for decades.

Even without overt scandal, the Board of Equalization is a poor way of setting tax policy. One example: A decree that although popcorn is hot when delivered to movie patrons, it’s cold by the time it’s consumed and therefore untaxable. It was a favor for one movie chain from a board member whose district included its headquarters.

That’s just one example. Another is the completely unprofessional handling of an income tax appeal from actor Rob Lowe.

Occasional journalistic efforts to expose the board’s unseemly practices have been largely ignored by the Legislature, for reasons that are quite logical from a purely political standpoint.

First, what politicians on the board have been doing is what the politicians in the Legislature are accustomed to doing.

Legislative staffers don’t have civil service protections and are often used for political purposes, such as campaigns. And private deals, rather than public accountability, are the stock in trade of legislative business.

Secondly, legislators see those four board seats as potential political landing places, akin to the common practice of naming unemployed politicians to high-salaried state boards – most recently ex-Sen. Isadore Hall, who lost a bid for Congress, to the Agricultural Labor Relations Board.

The Board of Equalization, created 138 years ago to ensure sure that local property assessments were uniform and directly assess utilities and railroads, later assumed other duties, such as collecting sales and fuel taxes and hearing income tax appeals from the Franchise Tax Board.

The obvious solution to endemic dysfunction and corruption would be to abolish the board and create a Department of Revenue to absorb its tax functions, plus those of the Franchise Tax Board, and the Employment Development Department, which collects payroll taxes for unemployment and disability insurance, with a tax court to hear appeals.

The Legislature’s own budget adviser first recommended such consolidation in 1943.

Complete consolidation would require a constitutional amendment. However, the state constitution merely specifies oversight of property taxes.

Everything else the board does – poorly, to be sure – has been added over the years by statute, and the governor and the Legislature could transfer those duties to a Department of Revenue.

The Board of Equalization’s rationale for being expired decades ago, and the recent revelations just underscore that to the larger public. It’s time for it to vanish.

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