Don’t look now, but state legislators finally are on the verge of eviscerating — if not eliminating entirely— the California Board of Equalization. It’s about time.
For generations, the board has been a legislative body in search of a legitimate purpose. Although overseeing the collection of gasoline and sales taxes and hearing appeals on income tax cases, the Board of Equalization primarily has existed as a holding position for legislators waiting to run for another office or hoping for a political appointment. The $142,577 annual salaries for the five board members has helped maintain its attraction.
But the board has more of a reputation for scandal than distinction. The most recent example is an audit that confirmed that $350 million in tax revenue had been allocated to the wrong government accounts, for which the board had no explanation. In addition, the audit confirmed such dubious board actions as having agency tax auditors working as parking assistants at political events.
If legislators had more of a backbone, they would just eliminate the BOE and consolidate its functions with the state Franchise Tax Board. But that would require a two-thirds vote, which is a non-starter. Instead, the reforms, which were tucked into the budget set to take effect on July 1, call for stripping the board of its staff and 90 percent of its duties and giving them to a new state revenue department that would report to the Governor’s Office. The board would continue to handle tax appeals but would be limited to only the functions spelled out in the state Constitution.
As state Sen. Mike McGuire, a supporter of the reform, told the PD Editorial Board last week, “It’s too little, and 90 years too late.” But it’s at least a step in the right direction.