The State Worker

Besieged California tax board gets into lease-approval business

Six leather chairs, $1,200 each, sit unused in a storage area at the Board of Equalization’s headquarters. The chairs were ordered for Board Member Jerome Horton’s Sacramento office.
Six leather chairs, $1,200 each, sit unused in a storage area at the Board of Equalization’s headquarters. The chairs were ordered for Board Member Jerome Horton’s Sacramento office. Board of Equalization

There’s nothing like money – or the state Legislature’s threat of yanking it – to focus the mind.

It’s double trouble when the state’s business-tax collector and auditor struggles to defend itself because its own business is in disarray.

That’s why the five-member Board of Equalization, after taking numerous hits for spending on office spaces and furniture, voted last Wednesday to make new real estate leases subject to their vote.

Normally such day-to-day decisions are beneath the leaders of an agency that has 4,400 employees, a $595 million budget and collects and distributes $60.5 billion in use taxes, retail sales taxes and dozens of other taxes.

Yet there was BOE Chairwoman Fiona Ma, a Democrat, proposing a policy last week that would have required board approval for new leases except those for members’ personal offices. After a lengthy discussion, the board voted unanimously to include all new leases – including those for their own offices.

“I think there’s a whole lot of wisdom in following the direction of those folks that set your budget,” Board Member Jerome Horton said before the vote.

During recent budget hearings, lawmakers made frequent reference to a Sacramento Bee investigation that revealed taxpayers shelled out $130,000 on furnishings and installation for Horton’s Sacramento office last year. The report also showed that Sacramento office leases for Horton and three board colleagues cost the public a combined $740,000 annually.

I think there’s a whole lot of wisdom in following the direction of those folks that set your budget.

Jerome Horton, Board of Equalization board member

And the BOE statewide has more offices now than six years ago, despite a sharp decline in the number of taxpayers visiting those facilities.

Some BOE officials, including Republican Board Member George Runner, say that merely counting public visits fails to recognize the range of work the offices facilitate. That side also says that state law requires members have offices within their districts to administer tax laws. And besides, Runner and those of like mind say, voter expect that their elected representatives serve them.

Horton, a Democrat, counters that the business needs of the agency and convenience of taxpayers should dictate office policies, not politics.

Budget hearings didn’t go well for the agency, either. Some BOE officials struggled to answer basic questions: How many people work for the BOE? If the BOE needs more money to hire, how many positions are unfilled right now? How much do its leases cost? How does the agency decide to open or close offices?

The board came back with some answers. Eventually.

The board’s turmoil led lawmakers to propose cutting the BOE’s budget by $11.2 million instead of adding $5 million the agency says it needs to hire more staff. And that led to the board’s public show of concern about office leases.

So now the nation’s only tax agency with an elected board awaits its fate. The deadline to pass a budget is two weeks away. We’ll know then if last week’s unusual action did anything to stave off budget cuts for the BOE.

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