Critic of spending accepts tax-free per diem
State Sen. Tom McClintock, a fierce critic of government spending, has accepted hundreds of thousands of dollars in tax-free per diem payments from the state that are meant to help legislators who, unlike McClintock, live far from the capital.
The Republican lawmaker said he is entitled to the $170-a-day payments because his legal residence is a family home in his Senate district of Thousand Oaks, where he is registered to vote.
McClintock and his family live year-round in Elk Grove, 14 miles from the state Capitol. He moved to the Sacramento suburb in 1996, when he was elected to the state Assembly, and he bought a five-bedroom, 4,090-square-foot home in 2004. His children attend Elk Grove schools and his wife works at a Baptist church there.
The intent of the payments is to help defray the living costs of lawmakers attending the eight-month legislative session far from their homes.
Legal experts say McClintock is taking advantage of a loophole that gives him a right to the tax-free payments even though he lives near the Capitol.
“This certainly strikes me as an example of the abuse of the per diem system,” said Derek Cressman, government watchdog director for California Common Cause.
The state elections code requires legislators to maintain a residence in their district, and presumes that a senator is “domiciled” where he or she is registered to vote, said Lance Olson, an attorney with expertise in government and political law. It is partly on that basis that McClintock has claimed the tax-free payments.
The U.S. tax code’s definition of legislative per diem also supports McClintock’s position.
“The place of residence of such individual within the legislative district which he represented shall be considered his home,” the tax code says.
Overall, McClintock has received $306,000 in per diem while living in Elk Grove during his eight years in the Senate and previous four years in the Assembly. Last year, the senator collected $36,012 in per diem, a record amount for him.
Per diem paid to a legislator whose home is within 50 miles of the Capitol building is considered taxable income. Since he is citing Thousand Oaks as his home, McClintock has taken the money tax-free, atop his annual Senate salary of $116,000.
The receipt of the money by McClintock, while not illegal, is striking because his political career has been fueled by unrelenting opposition to government spending. Several of his unsuccessful campaigns for statewide office have centered on curtailing state spending. McClintock has spared no one, even fellow Republicans such as Gov. Arnold Schwarzenegger, in decrying bloated budgets.
The payments to McClintock, raised in an earlier campaign, now have become an issue in his race for the Northern California congressional seat being vacated by retiring Rep. John Doolittle (R-Roseville).
“For 30 years, Tom McClintock has railed against government spending while living well at taxpayer expense,” said Todd Stenhouse, a spokesman for Democratic congressional candidate Charlie Brown, a retired Air Force lieutenant colonel.
McClintock denied that his acceptance of the payments is a contradiction in a career spent fighting excessive spending by the state. He argued that money meant to defray expenses for a second home can also be used for the residence he lives in year-round.
“They are trying to confuse people into believing somehow this is a reimbursement to which I am not entitled, and that is flatly untrue,” McClintock said. “The per diem is a flat rate paid to make it possible to maintain a second residence close to the Capitol. That is a standard that applies to every member of the state Legislature.”
Most legislators whose year-round homes are near the Capitol, including state Sen. Darrell Steinberg and Assemblyman Dave Jones, both Democrats from Sacramento, do not accept per diem payments. Republican Sen. Dave Cox of Fair Oaks, about 25 miles from the Capitol, accepts per diem payments but pays taxes on them.
McClintock said the difference is Steinberg and Jones live in districts that are close to the Capitol, while his district residence is in Ventura County.
“Every legislator’s [Sacramento area] residence is close to the Capitol,” McClintock said. “My residential costs up here are much greater than the average legislator because my family is here.”
Former Rep. Doug Ose, a Republican running against McClintock in the June primary, called his opponent’s acceptance of tax-free per diem “bogus.”
“If he lives down there in Thousand Oaks, then fine, he is eligible for the per diem. But if he lives up here within 50 miles of the Capitol he is eligible for per diem, but not tax-free,” Ose said. “He can’t have it both ways.”
McClintock said he decided when he was elected to the Legislature in 1996 that he wanted his wife, son and daughter to be with him when the Legislature was in session.
“It’s a full-time Legislature, and I’ve made it very clear when I ran that I am not going to be a part-time dad,” McClintock said. “My family is going to be very close to me.”
Many legislators use the per diem to offset the cost of rented temporary housing, including shared apartments, while the Legislature is in session. Senators also receive an allowance to fly from Sacramento to their districts and back four times a month when the Legislature is in session. Many lawmakers fly home every weekend.
Typical is Sen. Alex Padilla (D-Pacoima), who generally stays at a house in Sacramento on Monday through Thursday when the Legislature is in session, but returns home Thursday afternoon for the weekend. He stays in Pacoima during the months when the Legislature is not in session, spokesman Bill Mabie said.
State records show that McClintock flew at state expense to Southern California 14 times last year for a total of 36 days spent in the district.
“Most of the time I spend up here,” he said, referring to Elk Grove.
McClintock said he deducts the mortgage interest on his Elk Grove house on his federal tax returns. The Thousand Oaks house, where he grew up, is owned by a family trust controlled by his mother, who lives there, he said.
Still, McClintock said, it is proper to consider Thousand Oaks his legal residence. He dismisses criticism, saying he has heard similar grousing in past elections.
“It’s a stock issue they have used,” he said of opponents.
The last one to criticize McClintock for accepting tax-free per diem was Dean Andal in the 2002 Republican primary for state controller. McClintock decisively won the primary before going on to lose in the general election to Democrat Steve Westly.