A Proposal to Cut Millions in Unnecessary Spending Both Parties Can Agree On
Last week, after newly-elected members of the Legislature raised their hands to take their oaths of office, many also took the opportunity to introduce their first bills of the legislative session.
In a sea of costly new programs, prohibitions on people’s freedoms, and new government mandates, one refreshing idea stood out – eliminating a now-unnecessary state agency and saving taxpayers millions.
Democratic Assemblyman Adrin Nazarian has proposed a constitutional amendment to eliminate the State Board of Equalization, Assembly Constitutional Amendment 2. If his bill is enacted, voters would have the final say at the ballot box in 2020.
As I wrote previously on Right by the Bay, the Board of Equalization used to hear appeals in individual and business tax disputes. Advocates of more spending in Sacramento never really liked the Board because it would sometimes find in favor of the taxpayer, depriving the big spenders of millions they could spend on programs.
In 2017, state lawmakers and Gov. Brown’s administration seized upon multiple scandals at the Board involving nepotism in hiring decisions and malfeasance by Board Members to enact legislation taking away most of its powers. It created a new Department of Tax and Fee Administration to administer state tax laws and a new Office of Tax Appeals to act as the state’s tax court.
In his press release announcing his legislation, Nazarian argues that, “the Board of Equalization is a redundant, scandal-plagued office that can be eliminated to save taxpayers’ money and re-direct resources to strengthen the middle class.” He’s right.
To be sure, this power grab was not a good deal for taxpayers. But now that the power has been grabbed away, it simply makes no sense to keep this neutered state agency in business.
Certainly, the few duties given to the Board in the State Constitution, namely overseeing property, insurance, and alcohol excise taxes, could be transferred to other relevant departments in state government and no one would even notice.
According to Nazarian’s office, the Board of Equalization still retains 195 positions after the rest of the 4800 were shifted away to the new departments. Taxpayers spent $30 million in 2017-18 on the downsized board and will spend $29 million this fiscal year.
As the San Francisco Chronicle notes in its aptly-named editorial supporting ACA 2 entitled “Throw this board overboard,” several former Board of Equalization members including State Treasurer-elect Fiona Ma, State Controller Betty Yee, and outgoing Treasurer John Chiang all support eliminating the Board.
So far, fiscal conservatives have been largely silent on eliminating the Board. They shouldn’t be. Nazarian’s bill is a rare opportunity in a liberal supermajority where Democrats and Republicans can join to eliminate a now-obsolete state agency and cut millions in state spending.
Tim Anaya is Communications Director for the Pacific Research Institute.