California lawmakers on voted to gut a unique and embattled state agency that both collects taxes and allows elected representatives to settle disputes from taxpayers.
The Legislature on voted to strip the Board of Equalization of almost all of its power and to replace it with two new departments.
One of them, a new Department of Tax and Fee Administration, is expected to be up and running by July 1. It’ll take over the Board of Equalization’s responsibility to manage dozens of tax and fee programs, such as tobacco taxes, cannabis taxes and sales taxes.
The other department will take the Board of Equalization’s mandate as California’s tax court, where residents and businesses have appealed to elected representatives to settle their disputes with tax collectors. That work instead will go to administrative law judges who would be appointed from the state’s Office of Administrative Hearings.
Good government commissions and the Legislative Analyst’s Office have been calling for the dissolution of the Board of Equalization since 1929. It was created in 1879 to ensure that county assessors fairly collected property taxes across the state.
Since then, it has grown to become one of three main tax-collecting agencies in state government and the only elected tax board in the country that hears disputes from taxpayers.
In recent years the board has been rocked by scandals. The Sacramento Bee revealed questionable donations that appeared to benefit elected members, campaign contributions that were bundled in a manner that disguised their volume and an expensive renovation of a board member’s office that cost taxpayers $130,000.
A damning audit in March showed that board members at inappropriately intervened in the agency’s daily operations, created a climate of fear among state workers who feared retaliation from elected officials and allowed faulty accounting that misallocated tax revenue.
State Controller Betty Yee announced the proposal to break apart the tax agency on Monday. It was endorsed by Gov. Jerry Brown, Assembly Speaker Anthony Rendon and Senate President Pro Tem Kevin de León. Their supporters viewed the proposal as long-overdue change at the tax agency.
Source: The Sacramento Bee