In summary
California’s Board of Equalization has a quirky history dating back to the 19th Century. It’s a launching pad to statewide political office, too.
California’s Board of Equalization is a coveted spot once again for state lawmakers looking for a new gig almost a decade after then-Gov. Jerry Brown signed a law gutting the organization of any serious governing responsibility.
This year, three current state lawmakers are competing for seats on the nation’s only elected tax board. They’re among some two dozen candidates on the ballot for its four elected positions, which are divided by geographic districts.
The board has long been a launching pad to higher offices in California politics — Fiona Ma served on it before becoming state treasurer, as did Betty Yee and Malia Cohen before each being elected state controller.
The agency itself is a throwback to the 19th Century. It’s rooted in an 1879 constitutional amendment that created it and charged it with “equalizing” county property tax assessments statewide.
From that narrow mandate, it swelled to become a juggernaut that collected a third of the state’s tax revenue and provided a venue for people and businesses to contest their tax bills in front of the elected board. It survived numerous efforts by governors to kill it outright, including attempts by Pete Wilson and Arnold Schwarzenegger.
That is until 2017, when a cascade of allegations about board members misusing the office to promote themselves led to an authoritative state audit that lawmakers could not ignore.
Brown signed a law stripping the agency of any powers beyond what voters gave it in 1879 and created two new departments that report to the governor instead of the elected board: one to collect sales and use taxes and another to hear taxpayer appeals.
After that, Board of Equalization elections tended to be lower profile contests. Ted Gaines, a former Republican state lawmaker from the Sacramento area, won a seat. Former Democratic Assemblymember Sally Lieber is up for reelection on the board this year. The other members had experience in local politics instead of inside the Capitol.
“We’re lean but we’re not mean,” said Lieber, the incumbent for District 2, which includes 19 counties centered on the Bay Area. “I think the Board of Equalization is the right size in the system right now…I do really believe that the board has a role to play in being a forum for taxpayers to come forward to.”
This year voters will see more contentious elections for the tax board:
- In District 1 representing inland California, Republican state Sen. Shannon Grove of Bakersfield has more than $900,000 in a campaign account and name recognition from her representing the San Joaquin Valley in the Legislature since 2010. Democrats are putting up a fight for the district. Fresno City Councilmember Nelson Esparza is running with the party’s support.
- In District 2 representing coastal California north of Los Angeles, incumbent Lieber faces San Mateo Community College District Trustee John Pimentel. Lieber has the Democratic Party’s endorsement, but a number of Bay Area Democratic leaders are backing Pimentel, including state Treasurer Ma and San Jose Mayor Matt Mahan.
- In District 3 representing the Los Angeles area, former Monterey Park City Councilmember Yvonne Yiu put up $760,000 of her own money and has about $1 million on hand. The race has another heavyweight in Assemblymember Mike Gipson, a Democrat from Gardena who has served in the Legislature since 2014.
- District 4 representing the San Diego area has an especially crowded race with Democratic state Sen. Tom Umberg of Santa Ana, San Ysidro school board member Martín Arias, San Diego Unified School District board member Cody Peterson, and Denis Bilodeau, a Republican supported by San Diego Assemblymember Carl DeMaio’s Reform California organization.
A forum for California taxpayers
The board was always popular among taxpayer advocacy groups, who liked that it provided a forum to focus on tax issues in a capital where debates often center on labor and business.
“It’s a very useful elected body that answers to the voters,” said Susan Shelley, vice president of communications for the Howard Jarvis Taxpayers Association.
Some of this year’s candidates are thinking of ways to make the most of the agency.
Arias believes the board could do more to assist homeowners and potential homeowners. As a taxpayer advocate in the San Diego County Assessor’s Office, he says he works with the Board of Equalization every day and has a front seat to how the system works.
“I think there’s a bigger opportunity here to make the Board of Equalization the constitutional office that it is — that it should be,” he said. “There’s a clear opportunity here for us to start advocating at the state level for all of our taxpayers, including those that don’t speak English.”
Umberg said he’d like the board to have more investigative power and resources. Citing instances in which San Bernardino and Los Angeles assessors have been arrested on felony charges, he said he’s most interested in the board’s oversight of property tax assessors.
“Although it’s not a high-profile job, it’s a critically important job, especially when we’ve got so many revenue challenges in California,” Umberg said in an interview with CalMatters.
Questioning BOE’s relevance
Advocating for the board’s expansion has drawn criticism from former board members and employees. Yee, a board member from 2004 to 2014, has been vocal about abolishing the board entirely because she believes that its limited responsibilities could be easily transferred to another department or agency.
“I just really do question how this board continues to have relevance,” she told CalMatters. “I sometimes feel like the board is really doing a lot of work in search of finding problems to solve. …I know with each of the board members, they feel very strongly about being a taxpayer advocate. But frankly, every public official should be a taxpayer advocate. ”
Democrats stopped short of killing the agency entirely because they would have had to put that question to voters.
“They should have just chopped the head of the snake off and done away with the Board of Equalization altogether,” said Mark DeSio, a former communications director for the board. “They didn’t do that. They left enough of the cancer to grow back.”
He cooperated with the audit that revealed misspending at the agency that appeared intended to promote its elected members as well as another that showed widespread nepotism in its hiring practices. He then lost his job in the reorganization and filed a whistleblower retaliation lawsuit against the state.
DeSio believes lawmakers want seats on the Board of Equalization because it allows them to maintain a high profile until they can run for office again.
“That was the recipe for disaster a few years back,” he said. “Somebody better watch these guys. They’re not there for the policy. It’s for the exposure.”
Cayla Mihalovich is a California Local News fellow.
