The tax-collecting agency the Legislature gutted in 2017 will get one more change as the calendar turns: David Gau, a career employee of the Board of Equalization, is retiring as its executive director.
Gau was appointed to the job in April 2016 when the elected leaders of the board sought to get a handle on an audit that showed it had misallocated tax revenue, as well as complaints about contracting and increased spending on events that appeared to be political in nature.
When he was appointed, the Board of Equalization had more than 4,200 employees, responsibility to collect about $60 billion a year in revenue and authority to settle disputes between taxpayers and other state departments.
Now it has fewer than 300 employees, no authority to overturn decisions by other state tax departments and a much smaller role in overseeing tax collection. Lawmakers assigned most of its responsibilities to the new California Department of Tax and Fee Administration.
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Gau said he took the job knowing the Legislature was about to make significant changes at the agency, but he was surprised in June when lawmakers chose to strip it of almost all of its power and staff.
In particular, the Legislature removed the Board of Equalization’s authority as the state’s tax court, replacing it with a new office of tax appeals.
“I did feel that certain changes were necessary. I was a little bit surprised that they were as dramatic as they were,” he said.
In some ways, Gau’s testimony in front of lawmakers last spring ensured the Legislature would shrink the agency’s mandate. He declined to speak at one Assembly committee, citing advice from a lawyer.
At a Senate committee, he revealed someone had threatened his job. He reports to the board’s five elected members, implying that one of them had pressured Gau to do something he didn’t want to do.
“I personally have been subject to that myself,” Gau said at the April hearing, referring to a report that another executive had been threatened.
In an interview this month, Gau declined to say who threatened his job.
“It was a very emotional year, a very challenging year, and obviously very stressful,” he said.
Gau earned $184,000 in 2016, according to state salary records. He joined the department as an auditor in 1981 and moved up the ranks through its different divisions.
“How did you work in one place for 36 years? What I always enjoyed was getting different opportunities to work in the Legislature, administrative work, tax programs. I got to do a lot of different jobs,” he said.
He told the board’s elected members he planned to retire three months ago. They recognized his years of service at the agency during a ceremony earlier this month. If there were hard feelings, the board members did not show them.
Board member George Runner praised Gau’s skill, dependability and integrity. “You really have led by example,” added State Controller Betty Yee, the board’s longest-serving member.