The State Worker

Facing spending sanctions, troubled California tax board suspends its public outreach

A state tax board on Tuesday temporarily banned flashy conferences for would-be entrepreneurs a month after an audit suggested that the agency’s largest events had sapped public resources and strayed from its mission to collect taxes.

The Board of Equalization unanimously voted for a moratorium on large-scale conferences until it can develop a new policy for so-called education and outreach activities. It’s allowing exceptions for smaller events that do not involve tax auditors or tax technicians.

The board also asked its executive leadership to investigate how the agency temporarily assigns tax auditors and other employees to postings that do not necessarily generate revenue.

State law requires that the board ask permission from the Finance Department and the Legislature if it wants to reassign a so-called “revenue-generating” employee to another post. The recent audit from the Finance Department said the tax board had not followed that rule, a practice that raised questions about its annual budget requests.

The audit reported that the board’s spending on outreach activities had tripled to almost $3 million a year since 2010. In one example, it described two “connecting women to power” events that cost a combined a $189,000 and featured motivational speakers. At one of them, 113 Board of Equalization employees volunteered to help register guests and guide drivers in a parking lot, among other assistance.

Board members Diane Harkey and Jerome Horton had planned to sponsor similar “connecting women to power” events this year. They canceled the events after the audit’s publication, they said at Tuesday’s meeting.

The agency also regularly sponsors smaller tax and nonprofit seminars, some of which also involve experts from the agency. Board members discussed banning them, too, but did not extend the moratorium to those activities.

“I think it would be wise and prudent if we just stopped everything until you all get a chance to go through every single program we have and make sure we are not in violation of” state law, board member Fiona Ma said.

Board member George Runner initially proposed the moratorium. He wants the agency to address the audit without ceding much authority to the Legislature or governor. Ma and State Controller Betty Yee have asked Gov. Jerry Brown to overhaul the agency.

The Board of Equalization collects about $60 billion in taxes and fees. Brown has imposed spending sanctions, and it has faced tough questions from two legislative budget committees over the past month about its reported misuse of public employees.

This story was updated at 5:30 p.m. on Tuesday, April 25 to clarify the extent of the board’s moratorium.

Adam Ashton: 916-321-1063, @Adam_Ashton. Sign up for state worker news alerts at sacbee.com/newsletters.

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