<\/p>\n
The Board of Equalization\u2019s former duties have largely been transferred to the Department of Tax and Fee Administration and the Office of Tax Appeal.\u00a0<\/p>\n
Stephen Lam\/S.F. Chronicle<\/p>\n
If you have no idea what the California State Board of Equalization is or what it does, you\u2019re not alone.<\/p>\n
The obscure agency, made up of four elected officials and the state controller, is the only elected tax board in the country. It was created by constitutional amendment in 1879 to limit corruption among county assessors and ensure property taxes were assessed uniformly and fairly across the state. At its peak, it oversaw the collection of\u00a0one-third of all taxes across California<\/a> and employed a staff of thousands.\u00a0<\/p>\n But in 2017, then-Gov. Jerry Brown and the Legislature stripped the board of most of its duties<\/a> and transferred them to the newly created Department of Tax and Fee Administration and the Office of Tax Appeal.\u00a0<\/p>\n Article continues below this ad<\/p>\n Why? Because corruption at the Board of Equalization had become too blatant to ignore.\u00a0<\/p>\n The Chronicle editorial board has begun rolling out its endorsements for California\u2019s June primary election. In the weeks to come, we will publish our assessments of all the state races, including the governor\u2019s race, plus local races and ballot measures. To read more about how the editorial board makes its election endorsements, go here<\/a>.<\/p>\n Plus: Look out for the Chronicle\u2019s Voter Guide to publish in early May, as ballots get mailed out across the Bay Area.<\/p>\n In 2010, a Bureau of National Affairs report<\/a> examined 70 complex Board of Equalization cases and found that taxpayers were more likely to win if they or their representatives made campaign contributions to board members. A 2015\u00a0state controller\u2019s audit<\/a> found that the board had misallocated nearly $50 million in retail sales tax revenue. In 2017, another investigation<\/a> found that a whopping 17.5% of board employees were related by blood or marriage, and a state Department of Finance audit<\/a> found that board members were improperly intervening in agency operations, including by unlawfully redirecting staff to work on pet projects.\u00a0<\/p>\n San Francisco Chronicle Logo<\/p>\n Make us a Preferred Source to get more of our news when you search.<\/p>\n <\/p>\n Add Preferred Source<\/p>\n <\/a><\/p>\n The board is now a shadow of its former self. It nominally oversees the 58 county tax assessors and handles certain taxpayer appeals, assesses and collects the alcoholic beverage tax, administers the tax on insurers, assesses the property of regulated railroads and certain public utilities, and assesses and collects the private railroad car tax.\u00a0<\/p>\n Article continues below this ad<\/p>\n It\u2019s also required by statute<\/a> to hold one (yes, just one) monthly public meeting.<\/p>\n But the board has little reason to exist, as we<\/a> have repeatedly argued<\/a>.<\/p>\n Yes, it has been given modest new responsibilities in recent years, such as implementing aspects of Proposition 19<\/a>, the 2020 ballot measure that curtailed the tax break for parents passing homes to their children<\/a>. But there\u2019s no reason the state\u2019s professional tax boards can\u2019t handle those duties.<\/p>\n At this point, the whittled-down agency is little more than a cushy political jobs program<\/a> \u2014 with a commensurately cushy salary. A Board of Equalization member\u00a0earns $184,447 annually<\/a> \u2014 the same as\u00a0California\u2019s lieutenant governor<\/a> and secretary of state.\u00a0<\/p>\n So, given these realities, what are voters supposed to do about the six candidates<\/a> running in the June primary election for the board\u2019s District 2 seat, which encompasses the Bay Area and stretches from the Oregon border to Ventura County?<\/p>\n Article continues below this ad<\/p>\n This editorial board isn\u2019t going to officially endorse a candidate for a role we don\u2019t believe should exist. But we interviewed the contenders and will give you our candid thoughts.<\/p>\n Incumbent Sally Lieber, a Democrat and former state Assembly member, is smart, well-spoken and passionate about helping taxpayers navigate the tax appeals process. She\u2019s used the board\u2019s limited authority effectively, as when she called for a hearing last year<\/a> to probe potential solutions<\/a> to the issue of widespread underinsurance among California homeowners<\/a>. In her endorsement interview with us, she proposed using the board\u2019s power to tweak Prop 19 implementation to give taxpayers more time to file complex paperwork\u00a0\u2014 an idea we support.\u00a0<\/p>\n Yet Lieber\u2019s almost blind fealty to the Board of Equalization\u2019s continued existence is frustrating.<\/p>\n \u201cBecause we are an elected board, (taxpayers) feel like there\u2019s an actual human there to listen to them. I don\u2019t actually try to solve their tax problems, but I make connections to our very able professional staff,\u201d she told us.\u00a0<\/p>\n Yet this philosophy\u00a0\u2014 that access leads to improved service\u00a0\u2014 is exactly what enabled the board\u2019s corruption in the first place.\u00a0<\/p>\n Article continues below this ad<\/p>\n Lieber also argued that eliminating the Board of Equalization would cost \u201ctens of millions of dollars a year,\u201d citing the legislative analysis of a 2023 bill<\/a> that proposed eradicating the agency. Yet that analysis stated that removing the board \u201cwould not impact state revenues\u201d and would in fact\u00a0save taxpayers at least $672,060 annually. (In an email, Lieber acknowledged her mistake, writing, \u201cI don\u2019t know how I could have been so far off in my recollection!\u201d)<\/p>\n Meanwhile, John Zaruka, a Republican retired hospitality executive, told us that he would push for the board to reassume its sales tax responsibilities \u2014 but if that didn\u2019t happen, \u201cYou question why it even exists and why you would get paid that kind of money.\u201d We were impressed by his pledge to donate his salary to food banks if elected. But Zaruka acknowledged that he\u2019s a \u201cnovice candidate\u201d who\u2019s still learning about the board\u2019s intricacies.<\/p>\n John Pimentel, a Democratic elected trustee of the San Mateo County Community College District and renewable energy executive, is no novice. He\u2019s open to dissolving the board and has the political sophistication to make such a case to the Legislature and to voters.<\/p>\n As California\u2019s deputy secretary of transportation in the 1990s, he was involved in efforts to merge the California State Police with the California Highway Patrol<\/a>, which an independent analysis found<\/a> would improve security and save taxpayer funds. We also think Pimentel could help foster accountability and transparency at the board: He and other trustees of the San Mateo County Community College District investigated the chancellor emeritus for unethical conduct<\/a> and voted to fire him<\/a>; in January, the former chancellor was convicted of felony tax evasion and perjury<\/a>. Pimentel also has legislative bona fides; he was a main proponent of a 2022 bill signed into law by Gov. Gavin Newsom that allows\u00a0San Mateo County residents to attend community college for free<\/a>.\u00a0<\/p>\n Guest opinions in Open Forum and Insight are produced by writers with expertise, personal experience or original insights on a subject of interest to our readers. Their views do not necessarily reflect the opinion of The Chronicle editorial board, which is committed to providing a diversity of ideas to our readership.<\/p>\n