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 or excerpted from newspaper reports or government investigations.)

Nation's Highest Public Pension. The widow of former Sheriff Sherman Block is receiving the highest annual public pension in the nation - $232,908 a year. An outraged Los Angeles County Board of Supervisors voted unanimously on November 16 to seek ways to close "loopholes" in the county's retirement system. Supervisor Zev Yaroslavsky, according to a report in the Daily News, said the county must be at the "forefront of trying to restore common sense to the disability pension system." State legislation may be necessary, he said. According to the newspaper, the county's retirement board approved a full disability pension for the sheriff even though his death was related to a bathtub fall. The board ruled that his widow was entitled to the full pension because he had been in ill health due to long-term job stress. The county already pays $243 million into the pension system annually, and that figure is expected to go up next year when a new state law allows police and firefighters to claim full disability pensions for cancer without proof that it is job-related.

Wasting Wastewater. Ninety percent of the wastewater going into San Diego's $201 million North City Water Reclamation Plant has been discharged into the ocean after going through the expensive treatment process. The San Diego Union-Tribune examined plant records for the first two years of operation and reported October 10 that only 3 percent of the water has been reclaimed and sold. An additional 7 percent of the water is used at the plant for landscaping, cleaning filters and testing machinery. Commenting on the 16 billion gallons discharged into the ocean since the plant opened, Sierra Club attorney Bob Simmons said, "I can't think of anything to rival it in terms of the magnitude of water waste and waste of taxpayer money. It's scandalous, frankly." However, Peter MacLaggan, executive director of the Water Reuse Association, said demand for the reclaimed water, which cannot be used for drinking, will grow.

Welfare Fraud. The Los Angeles County Grand Jury reports that fraud in the county-run welfare system may be costing taxpayers more than $500 million a year. The 23-member panel, in its final report last June, urged that the county retain an outside individual or private management firm to make sure the jury's recommendations are implemented. According to a Daily News report, the jury found 16 major deficiencies in the county welfare fraud prevention and detection program. They included too few cases investigated. Social Services Director Lynn Bayer was skeptical of the $500 million figure but added that more can be done. She noted that the county has already reinstituted its policy of sending an investigator to the residence of each welfare applicant to verify eligibility. This process was abandoned 25 years ago because of its cost. The jury, reported the Los Angeles Times, found the county less likely to deny benefits as a result of investigations, with a denial rate of 34 percent compared to Orange County's 71 percent. Further, welfare recipients were overpaid by more than $325 million, with about $225 million that could not be recovered. The jury concluded that the department's problems stem from "the inertia of a bureaucratic monolith."

Failed Computer Projects. While California is considered the cradle of computer technological development, its state government has had more than its share of crashed programs that have cost taxpayers many millions of dollars. As reported in the Los Angeles Times, in the decade of the 1990s, California has produced more government computer failures than any other state, with nearly $500 million wasted on abandoned systems. These include an $18 million computer link with four welfare networks. The Davis administration ended the project early this year. It lacked adequate controls and oversight, according to The Times' report. That made five failed projects in this decade. The others: $51 million to automate the Department of Motor Vehicles; $201 million, including $90 million in federal penalties, for the child support tracking system; $18 million for a prison information system and $52 million for Lottery Scratcher automation. Costs of the prison information system were recovered from the contractor. The Times' Virginia Ellis wrote: "This latest failure bolsters the considerable evidence that innovations by the private sector are not easily transferred to the public sector, where adjustment to radical change is frequently difficult. At the root of California's failures is a government culture that did not adapt easily to the Computer Age." Exceptions to the rule: Successful computer systems at the Franchise Tax Board and the Secretary of State's Office. They allowed those who would use the system to help in the design phase. To avoid future breakdowns, the state Department of Information Technology requires projects to be built in phases, and the contractor is not paid until a phase is successfully completed. Outside consultants are hired to trouble-shoot.

Belmont Update. A movement to break up the massive Los Angeles Unified School District seems to be gaining momentum in the wake of the Belmont Learning Center fiasco (see Accountability Files in October's Cal-Tax Digest). While the Belmont controversy has made headlines across the nation, the LAUSD record for lacking accountability is long and tortuous, to wit:

Useless Video Project. LAUSD spent $712,500 on a useless teen-age health video series, according to a report in the Los Angeles Times. School Board Member David Tokofsky said, "Like much in the district, we led with our heart, we reached and grabbed any money and we didn't have a plan, oversight or controls. And there isn't a kid who benefited." District auditors were unable to establish a paper trail of responsibility for the project, funded from National Guard money made available because Congress downsized the military. A review panel of teachers and others gave the series, 18 months in production and 50 percent over budget, a flunking grade: "Programs were rambling and poorly organized - took too long to present any information. Main characters are unrealistic, acting is staged. Actors spoke too fast." The 1994 contract was awarded to a company that was no longer listed in the telephone directory, according to The Times' report, published in November 1998.

Tax $$$ Not @ Work. The nation's second-largest school district left more than $330 million unspent from a 1998 fund allocated to individual Los Angeles schools, despite unmet needs for textbooks, special-education programs and better building maintenance, reported the Daily News of Los Angeles on August 13. The newspaper quoted district officials as blaming poor management, inability to determine where funds should go, and squabbling among those who decide how the money is spent. Deputy Superintendent Ronald Prescott said the district has experienced the same problem for the past three years. "The money can be used for anything. We are looking at why we have such a large carry-over. Some schools spend all the money they are given, and others are simply sitting on it." School Board Member Caprice Young did not mince words: "The reason is simple. The budget process stinks. It's not a big secret."

Belmont. LAUSD officials continued to debate whether to complete the half-finished $200 million downtown high school complex that sits on an abandoned oil field laced with methane gas, reported the Daily News back in late June. The debate continued into the fall, following the board's decision to dump Superintendent Ruben Zacarias.