Balance on Potent Panel Is Likely

In the races for California’s Board of Equalization, a little-noticed but powerful panel that oversees more than $40 billion in yearly tax collections, the past is ever present.

California, which created the board in 1879 by constitutional amendment, is one of only a few states in the nation that has an elected panel, rather than a court, to resolve tax disputes and enforce collections.

Since the early 1980s, the four districts that make up the board have been drawn to practically ensure seats occupied by two Republicans and two Democrats. The political majority on the board, and thus its philosophical direction on tax policy, is determined by whom voters statewide select as controller; that official serves as the fifth member.

The board often presides over disputes involving large corporations and wealthy people trying to avoid millions of dollars in tax payments, sometimes through complex avoidance schemes.

Two years ago, 22 corporations persuaded the board to pay them $82 million in refunds -- even though the companies had paid no state income tax to begin with. In the coming term, the board is expected to hear cases in which hundreds of companies received as much as $100 million in tax credits under a program that was intended to develop jobs for the poor -- but didn’t.

In the board’s Democratic-drawn districts, incumbent board member Betty Yee in Northern California and former Assemblywoman Judy Chu in the Los Angeles area hold the partisan advantage. Yee’s seat hugs the coast from the Oregon border south through Santa Barbara County; the seat Chu is running for covers much of the metropolitan Los Angeles area.

On the Republican side, incumbent board member Bill Leonard of San Bernardino, who holds an inland district stretching from northern Los Angeles County to the Oregon border, and newcomer Michelle Steel, in a mostly inland seat that reaches to the Mexican border and includes Orange and San Diego counties, have an edge.

The two main parties are endorsing challengers, but the races are not viewed as competitive. The Democratic candidate in District 2, the northern inland seat, is Tim Raboy, an investigator for the board, while the candidate in District 3, the southern inland region, is Mary Christian-Heising, a La Jolla journalist. The Republican challenger in the northern coastal area is David J. Neighbors, an accountant; his counterpart in the Los Angeles area is Glen Forsch, a commercial property owner.

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christian.berthelsen@latimes.com