Balance of power in flux on state tax board

Judy Chu’s election to Congress on Tuesday after more than two years on the state tax board could change the balance of power on the panel, which can affect corporate taxes to the tune of millions of dollars.

Her now-vacant board seat gives California’s business lobby a coveted opportunity for more influence on its decisions, especially if Gov. Arnold Schwarzenegger, a longtime ally, makes a business-friendly appointment to replace her, as he is expected to.

The tax board’s decisions can have major consequences for industry; its wide-ranging actions include determining which companies are eligible for California’s myriad corporate tax breaks, and raising taxes 16-fold on fruity and fizzy “alcopops.”

Consumer advocates hope for a liberal in the mold of Chu to fill the seat.

Lenny Goldberg, executive director of the California Tax Reform Assn., said only special interests pay close attention to the tax board -- “generally corporate interests that are trying to get their way with millions of dollars.”

Liberal Democrats have dominated the five-person Board of Equalization in recent years, but Chu’s exit leaves the panel evenly split between two conservatives and two liberals. Whomever Schwarzenegger picks would be the swing vote.

“We will appoint a pro-taxpayer replacement very soon,” said Aaron McLear, a Schwarzenegger spokesman.

With the nominee requiring confirmation from both houses of the Democratic-controlled Legislature, focus has been on business-friendly Democrats to represent the Los Angeles-area tax district. Topping the list are state Sen. Ron Calderon of Montebello and former Assemblyman Jerome Horton of Inglewood, according to lobbyists who are tracking the appointment process.

Also angling for the job is Chu’s husband, Assemblyman Mike Eng of Monterey Park.

Chu’s chief deputy, Steve Shea, will serve as the interim fifth board member until a nominee is confirmed. The next election for the post will be held in 2010. Because of the Board of Equalization’s low profile, incumbents rarely lose bids for reelection.

Teresa Casazza, president of the California Taxpayers Assn., a business-backed group, said her organization wants a nominee who is “fair and open-minded and respectful of the position of taxpayers.”

The California Chamber of Commerce declined to comment, as did many business lobbyists.

Calderon, a self-described “pro-growth” moderate, said he has been lobbying the governor’s office for the job. He said he believes businesses appealing their tax bills aren’t given the benefit of the doubt by the current board.

“There’s an attitude right now. . . . They’re guilty before they’re proven innocent,” he said. “I’d like to change that tone.”

Horton, also a moderate, lost the 2006 Democratic primary to Chu. During his six years in the Assembly, he was perhaps best known for holding out as long as possible before casting a vote, calling himself “Mr. 41,” a reference to the last vote needed to past most bills. Both come with political baggage.

Calderon is known for extravagant campaign spending.

Horton was sued in April by his former campaign strategist, Richie Ross, for failing to pay $17,424 in fees accrued during his 2006 campaign. Ross said Horton paid up almost immediately after the suit was filed. Horton could not be reached for comment.

Eng said Monday that he had not spoken with the governor’s office about the post but would seek the seat.

“I think I have the ability to make, to evaluate, complex decisions as to public policies,” said Eng, who was elected to the Assembly in 2006 after holding local government posts.

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shane.goldmacher @latimes.com