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 Mismanagement. Los Angeles City Controller Rick Tuttle says the city is mishandling taxpayer dollars to the tune of more than $100 million a year. As reported by the Los Angeles Daily News, Mr. Tuttle on June 1 said the city has allowed permit and license fee payment checks to sit uncashed for months. He contended that the city neglected to collect hundreds of thousands in state and county tax credits. He said his office's recommendations for improvements have been ignored over the years. "The buck passing has got to stop," he said, urging the city to create a finance director position to oversee revenue collections. Mr. Tuttle said the city collected $2.26 billion in 1990 from various taxes and fees, but in 1999 collected only $2.79 billion, which amounts to $2.18 billion in 1990 dollars. Counting inflation, that's a decline "despite a booming, vibrant economy and many more city fees at higher rates. Something is wrong here," the controller said. He was critical of the city's enforcement of its business tax collections, noting that some 60,000 businesses do not pay the tax. If they did, the city would be about $60 million richer.

East Bay Parks Get Scathing Audit. An audit of the East Bay Regional Parks District slammed lax financial controls that allowed a former title coordinator for the district to divert $23,000 in escrow funds to accounts he controlled. According to the Contra Costa Times, Glenn Pridham has confessed to embezzlement. The audit also found that park employees failed to provide receipts for $16,000 in cash advances and an uncashed check for $500,000 was found in Mr. Pridham's home. Pat O'Brien, the district's general manager, responded by temporarily ceasing cash advances to employees, reorganizing the land acquisition department, and strengthening organizational controls. Officials say the audit may upset plans to put an East Bay parks tax on the ballot in November.

Anti-terrorist Drill. From the San Francisco Chronicle's Matier and Ross report of May 31: The Muni donated an old bus for police anti-terrorist training at a remote area near San Francisco International Airport. The bus was riddled with bullets. A Muni whistle-blower noted that the fare box in the bus was blown away, because someone at the transit agency forgot to take it out before the shooting started. Those fare boxes cost $13,000 new.

Golden Watchdogs. The San Diego County Taxpayers Association, in addition to its Golden Fleece awards for questionable use of tax dollars, honors government for efficient use of tax dollars. One winner this year was the San Diego Unified School District for its central office downsizing that eliminated more than 100 jobs, freeing up $8.3 million for classrooms.

Oakland School Fraud? The Alameda County District Attorney and the U.S. Attorney General, in conjunction with the FBI, are looking into instances of alleged fraud in the Oakland Unified School District, the San Francisco Chronicle has reported. In one case, school officials discovered thousands of dollars missing from a new teacher support program and referred the matter to the county D.A. In the other case, federal authorities are investigating a tip that vendors overcharged the district for building supplies and walked off with some of the construction materials intended for federally funded school renovation work.

Golden Fleece, San Diego-style. A winner of one of the San Diego County Taxpayers Association (SDCTA) Golden Fleece awards is the city of Oceanside for paying $3,600 to a therapist to help police officers deal with the stress of moving to a new building. Overtime also was paid to many officers and staff who were required to attend, the total cost of which was not released, according to the SDCTA. The association, which awarded annual fleeces on May 18, also noted that library staff had to move to the same building without the help of stress counseling.

Oceanside paid $3,600 to a therapist to help police officers deal with the stress of moving to a new building.

Phone Sex Number on State School Test. A phone number on the SAT-9 test given to California school children this month contained a phone sex telephone number. According to the Bakersfield Californian, an eighth-grade student at El Tejon School (in Kern County) called the number because he thought he would get information about a boom box described in the test question. Instead, he got information on phone sex. School Principal Shelly Mason confirmed that the number dialed by the student was in a reading comprehension test distributed to schools as part of the state's standardized testing program. Reaction of teachers who listened to the recording ranged from revulsion to amused amazement. Bob Anderson of the State Department of Education said blocking out the line on remaining tests could be problematic due to test security. Educators tried to put a positive spin on the development, saying that it shows kids are paying attention and taking the test seriously.

Raiders. Figures released on May 8 show taxpayers have been billed more than $6 million in the three-year court battle between the Oakland Raiders and the city of Oakland and the county of Alameda. The San Francisco Chronicle reported that there appeared to be no end in sight as the football team's $1.1 billion lawsuit headed toward trial in Sacramento County Superior Court. The legal expenses, reported the newspaper, are in addition to the $15 million a year in stadium construction costs in the deal that brought the team back to Oakland in 1995, a deal that was not supposed to cost the public anything. The Raiders contend they were promised that all their games would be sold out and they should be compensated because the worth of the team has been diminished by poor attendance.

Retired Judges. The Orange County Register reported on May 7 that more than 100 retired judges are returning to courtrooms and earning full pay on top of their pensions, with no accountability to voters. Judges receive pensions of up to $85,000 a year, plus full daily salaries, and pay for the costs of driving cars to court. California Chief Justice Ronald George approves the 60-day assignments for the retired judges. Several of them earn more than Justice George, and one jurist, Russell Schooling in Los Angeles, was paid more than $216,000 last year, including his pension. That's more than U.S. Chief Justice William Rehnquist's $181,400 annual pay. Senate Judiciary Committee Chair Adam Schiff told the newspaper that the Legislature has neglected the need to create new judgeships for several years. "The chief justice has responded to that in the only way he can, bringing people out of retirement until the Legislature acts," the senator said. The retired judges do not have to stand for election, as sitting judges must every six years.

LAPD. Los Angeles city and county will spend at least $17.6 million in the next fiscal year investigating police corruption and improving the department, according to an April 27 Associated Press report. It says the figure could rise, and it does not include the $30 million that Mayor Richard Riordan wants to set aside for potential liability from civil suits or the $2.7 million already spent this year on the investigation, The AP reported. The county is planning to spend $6.5 million in district attorney and public defender costs, which is about 12 percent of the $48 million the county expects in additional revenue in the fiscal year. "We have all kinds of programs that could use the money," County CAO David Janssen told AP. "It's a draw on the money that we obviously would prefer we didn't have." At the time, 67 convictions had been overturned and about 30 officers had been fired or suspended for falsifying reports, lying under oath or planting evidence.

A retired judge, working on two-month assignments, made more than $216,000 last year, including his pension.

Fired (Millionaire) Manager. The Redondo Beach City Council approved a $1 million settlement to former City Manager Bill Kirchhoff, who was fired in 1997 for allegedly spying on a police union's private meeting. As reported in the March 31 Los Angeles Times, city officials say the case was settled at the insistence of the city's insurance company, which covers half of the settlement. The rest comes from taxpayers. Council Member Gerard Bisignano said the lawsuit lacked merit but the settlement was a business decision. Mr. Kirchhoff, in his lawsuits against the city, said the council fired him in exchange for valuable election endorsements from the police union. He said union leaders wanted him out of the way so he couldn't expose irregularities in police overtime. Mr. Kirchhoff denied that he directed employees to secretly monitor a police union meeting to get information on unwarranted overtime. Mr. Kirchhoff was hired as city manager in 1991 and was credited with improving city finances, but council members said he became difficult to work with.

Cost-cutters Cause Higher Costs. Los Angeles' Chief Legislative Analyst Ron Deaton says a committee appointed by Mayor Richard Riordan to cut costs has caused some of the delay - and higher costs - for renovation of City Hall. Mr. Deaton made the statement at a March 29 City Council meeting, the Los Angeles Times reported. However, Jessica Copen, a mayoral spokesperson, said the council, not the mayor, is responsible for the $26 million increase in the project, now expected to cost $299 million. Mr. Deaton said $12 million of the $26 million increase resulted from higher-than-expected bids on a construction contract. The higher bids were a result of a year-long delay - and construction inflation - while the mayor's cost-cutting task force looked for ways to reduce costs.

L.A. School Bond Oversight. Management fees for the $2.4 billion Measure BB school construction bond in Los Angeles are averaging 20 percent, and that's well above industry standards. The Los Angeles Times reported March 30 that the district's top investigator, Inspector General Don Mullinax, did not blame companies involved or make formal recommendations. However, he said high costs could result from a lack of an initial budget, pressure to begin projects soon after the bond was approved in 1997, staff changes and lack of coordination between the district, the outside managers and a citizens' watchdog committee. The Los Angeles Daily News said as much as $51.3 million has been wasted on management fees that could have gone into school construction and repairs. The fees consumed between 18.5 percent and 20.7 percent of all money spent, more than twice the percentage recommended by the state, according to the two-month investigation. "That's not reasonable. What we're paying here in Los Angeles is definitely higher than elsewhere," Mr. Mullinax said.

Inside the State Budget. From the Legislative Analyst's Office (LAO) annual contest in which members of the news media are quizzed: The administration is requesting Global Positioning Systems for what purpose? (a) To help ambulance drivers locate addresses. (b) To assist in searches for escaped prison inmates. (c) To identify the location of neighborhood recycling centers. (d) To monitor traffic flow on state highways. Answer: (c). The answer to another quiz question: 1,317 percent, or from $6 million to $85 million. The question? Since 1992, when a ballot measure (opposed by Cal-Tax) gave the California Public Employees Retirement System authority to spend funds to administer the retirement program without legislative appropriation, how much more has CalPERS spent on external investment advisors? The analyst also noted that the administrative costs for a proposed program to encourage prospective teachers to teach in low-performing schools amounts to 40 cents for every dollar in fellowships provided to teachers. Also, on average, it costs the Department of Corrections 31 percent more to use prison inmates for construction projects than it does by hiring a private contractor. Dan Carson of the LAO says no reporter covering the Capitol had all the answers, so the usual prize, a dozen donuts, was consumed within the office.

Man Bites Dog Tax Story. This is the equivalent of a man-bites-dog tax story, since the very wealthy usually don't mind voting to pay what for them would be a piddling amount. The tiny town of Atherton, near Palo Alto on the San Francisco peninsula, is the third-richest in the nation, according to Worth magazine. The average home sells for $2.3 million. Since Proposition 13 cut property taxes in 1978, residents have approved parcel taxes to provide services. There is no business in the town. However, voters in March refused to renew a $750-a-home tax that provides 25 percent of the city's annual $6.2 million budget. The Los Angeles Times interviewed Sandy Crittenden III, a "typical conservative Republican" and commercial real estate investor. He said he voted against continuing the tax because he hates seeing waste in government. For example, the police chief recently resigned after being charged with voter fraud, according to The Times, and the city manager departed amid complaints that he paid too much attention to his tennis game. There also was what the newspaper called a "botched" sale of a police dog that resulted in a $22,000 settlement. In addition, city credit cards and cellular phones were provided to even the "lowliest municipal workers." Interim City Manager Ralph Freedman has outlined a plan to cut city operations and to raise revenue by increasing building fees and creating new taxes or fees. For example, the city may charge a fee for homes with security systems wired into the police department. "We're going to have to nickel and dime people to survive," said Mayor Nan Chapman.

Hoarding Books. A brouhaha at Chico State University has developed over library books and faculty members who check them out and don't bother to bring them back, reports the Chico Enterprise Record. They are immune from fines for overdue books and, according to Joe Crotts, head of library access services, a significant percentage of books are returned only when a notice of intent to dock the faculty member's paycheck (to replace the book) is issued from the payroll department. He said 6,000 books were checked out by 471 faculty members in March and 90 percent were expected to miss the April deadline to return them. He said there were eight individuals with 100 books checked out. One had more than 250. Students are allowed to check out a book for 21 days and face a 25-cents-a-day fine when the book is overdue.

Fire Fees Backfire. The Elk Grove Community Service District (Sacramento County) took it on the chin recently, public relations-wise, when it billed deceased car owners for the costs of emergency services in response to the deadly crashes on fog-shrouded Interstate 5 in 1997. Five people died in the accident, and surviving relatives were understandably upset. A newspaper story resulted. This prompted District Board President Pat Perez, Fire Chief Mark Meaker and others to apologize. They recommended that the non-resident fees be rescinded. There were two refunds of the $447 fees. State legislation passed in 1987 allows fire districts to charge non-residents fees for the costs of emergency services.

Park Poop. Mayor Willie Brown wants San Francisco to hire two park patrol officers to enforce ordinances against dog owners who allow their pets to run without leashes and poop in parks. The mayor called for spending $12,000 for two dozen doggie bag dispensers and as many dog warning signs. While one dog-walker told the San Francisco Chronicle that poop-free parks could help The City be more civilized, others questioned the need. "Some big-shot friend of the mayor must have stepped in dog poop," said Andrew Dickinson. "That's the only way you can explain it. What do we need dog poop police for?"

A committee formed to cut the L.A. City Hall renovation costs caused some of the higher costs.