California State Board of Equalization

The State Board of Equalization was created in 1879 by the ratification of the second Constitution of California. Its original mandate was to ensure that property tax assessments were uniform and equal across all counties in the state.[1]

Prior to the creation of the state income tax, sales tax, and fuel taxes in the 1930s, California's state government was almost completely supported by property taxes, which were and still are assessed at the county level by elected tax assessors. Assessors were tempted to boost their popularity with county voters by undervaluing voters' property (and thereby lowering their taxes). This presented the risk of counties with honest assessors paying more than their fair share of the burden of operating the state government, so the Board of Equalization was created to equalize the burden.

The California Franchise Tax Board and the Employment Development Department are separately also responsible for collecting taxes.[3] Some have criticized this as inefficient.[4] Efforts to reform the Board were made in the 1940s, 1950s, 1960s, 1990s, and 2000s.[3]

In 1994, Governor Pete Wilson vetoed a plan by the legislature to abolish the Franchise Tax Board and give its responsibilities to the Board of Equalization, explaining in his veto message that the state should have done the opposite. In 2004, Governor Arnold Schwarzenegger released a 2,500-page report seeking to merge the Board with other agencies and then promoted a bill by Assemblywoman Lois Wolk to do just that. The effort failed.[3] In 2008, the agency employed approximately 3,950 people throughout the state.[5]

By 2017, the Board had expanded to collecting $60 billion a year. It collected sales and use taxes, hazardous waste fees, jet fuel taxes, marijuana taxes, and over 30 additional taxes. That year, the Board had 4,700 employees and a $617 million annual budget. Board members are paid a $137,000 annual salary and are each allowed to hire a 12-member staff. Each year, the Board spends at least $3 million on education events where elected members appear before their constituents.[3]

In March 2017, an audit by the California Department of Finance revealed missing funds and signs of nepotism, leading to calls for the governor to put the Board under a public trustee.[6][7] In June 2017, the California Department of Justice began a criminal investigation into the members of the Board.[8]

On June 27, 2017, Governor Jerry Brown signed into law legislation stripping the Board of many of its powers. The legislation created two new departments controlled by the governor responsible for the Board’s statutory duties, the California Department of Tax and Fee Administration and the California Office of Tax Appeals.[9]

The Board still has its constitutional powers to review property tax assessments and insurer tax assessments, and its role in the collection of alcohol excise and pipeline taxes.[10] It retained 400 employees, with the rest of its 4,800 workers being shifted to the new departments.[9]

District map effective from January 1, 2015 until January 1, 2023 (left) and district map effective from January 1, 2023 (right) ()

  First District

  Second District

  Third District

  Fourth District

For the purposes of tax administration, the BOE divides the state into four Equalization districts, each with its own elected board member.[11] District boundaries are redrawn following the decennial census. The latest boundaries were drawn following the 2010 census and have been in effect since January 1, 2015.[12]

After being reduced to its constitutional responsibilities in 2017, the Board retained almost none of its tax and fee responsibilities.[13][14][15] The only property taxes it actively administers in its entirety are state-assessed properties and the Private Railroad Car Tax; the Board acts only in an appellate role in collecting the Alcoholic Beverage Tax and Insurance Tax, reviewing appeals of denials of claims for refund.[16]

However, the Board does continue to appraise and audit public utilities, railroad companies and properties owned by counties outside of their own jurisdictions, known as 'state-assessed properties', and hear appeals from its own staff appraisals.

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• Districts in California

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