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California budget

State Controller Betty Yee says California's tax collection agency has been mismanaged and needs a complete overhaul

State Controller Betty Yee called Friday for an overhaul of the state Board of Equalization. (California State Board of Equalization)
State Controller Betty Yee called Friday for an overhaul of the state Board of Equalization. (California State Board of Equalization)

Citing a review that found widespread mismanagement at the state Board of Equalization, State Controller Betty T. Yee on Friday called for stripping the panel of responsibilities for tax administration and audit and compliance functions so it can focus on handling taxpayer appeals.

Yee’s proposal came in response to an evaluation by the state Department of Finance that found board officials were improperly redirecting resources and employees to pet projects in their districts.

“In order to rebuild taxpayer trust, meaningful reform is essential,” said Yee, who serves as an ex-officio member of the board. “I urge the Legislature and the governor to strip the board members of all statutory functions and permanently move these duties and assigned staff to a separate new department under the governor.”

The Department of Finance review found the board “had difficulty providing complete and accurate documentation” in response to inquiries, and “various levels of management were not aware of and could not speak to” certain actions, including the informal establishment of a call center, creating an unofficial office location and inconsistent use of community liaisons.

The evaluation said personnel records showed workers assigned to administrative jobs that they were not doing, having been transferred to help board members in their districts.

Even though each elected board member has a $1.5-million budget to cover office costs, some members borrowed workers from the head office, taking them from jobs that involved bringing in tax money and having them instead reach out to board members’ constituents, the review found.

The redirection of workers violated state budget rules.

In addition, the reviewers said the board “provided 11 different versions of its proposed sales and use tax allocation adjustment” and the Department of Finance found errors and omissions throughout.

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