Brown breaks up 138-year-old California Board of Equalization

OAKLAND, CA - NOVEMBER 3: California Governor-elect Jerry Brown speaks during a press conference at his campaign headquarters on November 3, 2010 in Oakland, California. Brown secured his second Governorship by defeating Republican challenger Meg Whitman with nearly 54% of the votes despite the record setting $160 million spent on her campaign. (Photo by David Paul Morris/Getty Images)

Gov. Jerry Brown signed legislation yesterday to break up the California Board of Equalization, a unique, obscure and powerful state agency that’s been handling our taxes and hearing tax appeals for almost 140 years.

Gov. Jerry Brown signed legislation yesterday to break up the California Board of Equalization, a unique, obscure and powerful state agency that’s been handling our taxes and hearing tax appeals for almost 140 years.

In and out of hot water for several decades - including a current Department of Justice investigation and a damning audit out earlier this year that accused BOE employees of putting $350 million in sales tax in the wrong accounts and other “mismanagement” - the state legislature and the government agree the BOE needs major changes. With Brown’s signature to break up the board - more than 90 percent of the 4,800 BOE employees will transfer to other agencies, including a new one - the California Department of Tax and Fee Administration. That is, if the state government can get the new agency up and running by the July 1 deadline.

A second new department, the Office of Tax Appeals will be created by January 1. It will take over the tax court run by the BOE. As for the original agency? It’s not completely dead. The Board of Equalization still has responsibilities that are defined in the State Constitution - those aren’t changeable by new legislation.

Guest:

Dan Walters, long-time CA politics observer with CALmatters, a nonprofit public interest publication