This article is from Cal-Tax Digest, published
by the California Taxpayers' Association.
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(Editor's Note: Following are examples of how tax dollars are spent, or misspent. Generally, these cases are based on newspaper or government reports.)
Los Angeles Police. Conservatively, the corruption scandal in the Ramparts Division of the Los Angeles Police Department will cost taxpayers $125 million, according to a report February 3 in The Los Angeles Times. Upon hearing the estimate from Police Chief Bernard C. Parks and city lawyers in closed session, City Council members reportedly gasped and sighed. Meanwhile, the Daily News reported that costs to taxpayers are likely to be much, much higher. Civil suits against the city seeking hundreds of millions of dollars had already been filed by at least 15 people arrested, detained or allegedly abused by police officers. The Daily News reported that the number of victims could reach 300, escalating the cost of the scandal and threatening the ability to pay for many city services for years to come.

Internet Innovation. Riverside County Treasurer/Tax Collector Paul McDonnell says the county's Internet auction of tax delinquent properties was a big success. The county sold 70 of 81 tax-defaulted timeshares in the Palm Springs-Palm Desert area for $160,000 in the aggregate. The sale, over Yahoo!, ended on February 7. The properties sold for up to four times the opening bid, which ranged from $900 to $1,447, though one property had a $2,727 minimum. "During the last 10 minutes, the bids were just flying in," said Mr. McDonnell, adding that the Internet can provide an inexpensive way to sell properties that have not been in high demand in the past. Each property received an average of 25 bids.

Prison Guards. Excessive overtime and extraordinary use of sick leave among California state prison guards have been costing taxpayers millions of dollars, according to the Bureau of State Audits. The bureau's January 26 report made headlines statewide. "In TV and newspaper ads, California prison guards have told the public for years that their jobs are among the toughest in the state," read The Los Angeles Times article. "They also happen to be among the best-paying." Using overtime, more than 5,000 of the $50,000-a-year correctional officers are making more than their superiors, and some sergeants and lieutenants are making $108,000 a year, which equals the annual salary of the statewide director of prisons. One lieutenant made $140,000, or twice his regular pay. The report says the mismanaged Department of Corrections' efforts to curtail excessive overtime and sick leave have been ineffective. It says the department could save $29 million a year if the guards' sick leave was reduced to a level comparable to that of the California Highway Patrol. Acting State Auditor Mary Noble said, "We consider annual sick leave of more than 48 hours to be significant, especially in light of the CHP's considerably lower average and the department's own experience at some of its institutions." Prison guard overtime costs in the last fiscal year totaled $160 million. The department's sick leave policy is a cause of the overtime problem. The audit report says that when a portion of the prison work force takes excessive days off for illness, the department is required under its agreement with the prison guard union to offer the most senior officers opportunity to fill in. Thus the overtime is concentrated on the highest pay ranges. Department Director Cal Terhune said many of the problems cited by auditors have already been identified and are being corrected.

Y2K Party Deficit. Instead of making a profit, the city of San Rafael (Marin County) lost $1.2 million when only 6,100 people showed up for a high-profile New Year's Eve bash. To break even, the $2.6 million event, featuring Bonnie Raitt, Huey Lewis and Jerry Lee Lewis, plus a $22,000 balloon drop, needed to sell 11,000 tickets. The loss represents 2.5 percent of the city's 1999-00 budget, and officials said the loss would be covered by redevelopment funds and a general fund surplus. County Auditor-Controller Richard Arrow said that the party, although sponsored by the city, was not a redevelopment project and therefore may not qualify for redevelopment money. The Marin Independent Journal also quoted Roy Gordon, a San Rafael resident, assaying it was "very stupid" to charge between $225 and $300 for a ticket.

Belmont Fiasco. The Los Angeles Board of Education has voted to abandon the Belmont Learning Complex as a school site after nearly 10 years of planning and construction that cost $170 million. The half-finished high school near downtown Los Angeles would have cost a total of $250 million and would have been the most expensive high school in California if not the world. A 5-2 vote of the board on January 25 accepted a recommendation from Chief Operating Officer Howard Miller and Interim Superintendent Ramon Cortines to pull the plug on the project because it is too hazardous. The 35-acre site was once an oil field and explosive methane gas and toxic hydrogen sulfide have been detected. Mr. Miller said, "As a potential high school, the Belmont Learning Complex, conceived in ignorance and nurtured by negligence, is a vortex of contamination that would continue to draw energy, resources, controversy and disaster." State Assembly-member Scott Wildman said Belmont "is one of the worst public works scandals in the history of Los Angeles." Authorities have been investigating allegations involving financial dealings and environmental laws.

Oakland's Problem Schools. According to the San Francisco Chronicle, a recent state audit discovered "suspiciously high attendance figures" in Oakland schools, a development that could cost the beleaguered district $10 million and move it closer to a state takeover. The district claimed 94 percent average daily attendance during the current school year, which is on a par with suburban districts that have lower truancy and suspension rates. Pete Yasitis of the Alameda County Office of Education said that for every percent that Oakland is wrong, the district will owe the state $1.6 million. "Compared with other districts, Oakland should be anywhere from 2 to 4 percent lower than what they have been reporting since the 1998-99 school year," he said. Interim Superintendent George Musgrove: "Everyone is very nervous about this one. This could be really, really big." Mayor Jerry Brown and state Senator Don Perata have warned that the district could be taken over by the state if it has to borrow millions of dollars to get out of debt. This is not unprecedented. Compton schools have been under state control since 1993. About two-thirds of the Oakland district's $350 million budget comes from the thousands of dollars it gets for each student attending classes full-time. Additional bad news for the Oakland district surfaced in the Chronicle's Matier & Ross column: When state auditors found 400 more teachers on the payroll than in the district budget, Dan Siegel, school board president, said: "Nobody knows how many teachers are working for the district - at least nobody knows for sure." The column also noted that new Superintendent Dennis Chaconas was verbally committed to a three-year contract paying him about $180,000 - up $35,000 from his predecessor, plus plenty of perks, including a $9,000 annual auto allowance, a $400,000 house loan, six weeks off for vacation or executive management leave, and $30,000 in moving costs, although he already lives in Oakland. If the state takes over the district, will the superintendent have anything to do? Senator Perata said he was worried about guaranteeing a three-year deal. If all this is as bad as auditors indicate and there is no way to prevent a state takeover, then you have just bought this guy a couple years on the beach," the senator said.

Howard Miller said, "As a potential high school, the Belmont Learning Complex, conceived in ignorance and nurtured by negligence, is a vortex of contamination that would continue to draw energy, resources, controversy and disaster."