Development: State Board of Equalization will pick new chair, vice chair at February meeting.

Next Steps: Members Harkey, Ma say they are considering running for chair.

Jan. 27 (BNA) -- The California State Board of Equalization (SBOE) will elect a new chair in February to replace member Jerome Horton (D), who has chaired the tax board for five years.

The five-member board voted unanimously Jan. 26 to put the question of the chair and vice chair on next month's agenda after member and current Vice Chair George Runner (R) raised the question during the monthly board meeting. Members Diane Harkey (R) and Fiona Ma (D) both told Bloomberg BNA Jan. 27 they are considering seeking the chairmanship.

The SBOE's policy manual calls for board officer elections every January. Runner told Bloomberg BNA Jan. 20 that he asked that the item called Organization of the Board be placed on the Jan. 26 meeting agenda while it was being drafted, and was surprised to see it wasn't on the agenda when it came out 10 days in advance, as is required by state open meeting laws.

As chair, Horton has the authority to approve board meeting agendas.

“It's clearly not just an oversight,” Runner told Bloomberg BNA.

Long-Serving Chair

Horton is the longest serving chair since Richard E. Collins filled the post from 1915-1946, according to a listing of SBOE chairs and vice chairs on the agency's website. The office has generally rotated among board members every year or two since then, with the exception of one chair who held the post for almost four years from 1991-1994. Horton was first elected chair in 2011, and held the post without another vote until January 2015, when the most recent vote was conducted and he was re-elected.

At the Jan. 26 meeting, Runner made a motion to place the matter on next month's agenda. While discussing the motion, Horton and Runner both referenced a memo Horton sent to members on the topic Jan. 25.

Horton's Memo

In the memo, obtained by Bloomberg BNA, Horton said he intended to place the election of chair and vice chair on the agenda for January, but was unable to “due to a few unresolved issues.” He said he would place the item on the Feb. 23 agenda.

In the memo, Horton pointed out that historically the chair has rotated among members.

“I have come to appreciate the wisdom of this policy,” Horton said in the memo. “I recommend that we consider the reinstitution of such a policy as a fair and organized method for selecting the office each year in conformity with our constitutional tax administration and adjudicatory role.”

He also suggested new procedures for placing items on the agenda, and for selecting chairs for the board's various committees.

“I look forward to supporting the transition of our new chair at the February board meeting and sincerely appreciate your understanding, as well as your consideration of these recommendations,” Horton said.

Rotation a Possibility

Before the vote, Runner and Horton agreed the board should discuss rotation of the chair, and other options for handling board leadership, at the February meeting.

Ma told Bloomberg BNA Jan. 26 she asked executive staff members about placing the item on the agenda in recent weeks, but didn't make a request directly to Horton.

“Per the BOE's procedures, we elected a chair last January and I expected this to be on the agenda,” Ma said. “The board will instead decide at the February meeting who will lead this organization as we overcome the challenges we are facing, with the priority being the controller's recent audits.”

Ma was referring to an audit from State Controller Betty T. Yee (D) released in November that found widespread deficiencies and lack of oversight in the sales tax fund, as well as the revolving fund used for salaries, travel and vendor payments and several other funds from 2013 to 2015. SBOE Executive Director Cynthia Bridges is no longer handling day to day operations of the tax agency, but is instead working on correcting the problems raised in the audit (2015 Weekly State Tax Report 46, 11/20/15).

As controller, Yee serves as the fifth member of the SBOE along with the four members elected from geographic districts in the state.

Through a spokesman, Yee and her deputy controller for taxation, Yvette Stowers, declined to comment on the question of the board's organization and leadership.

Harkey said she believes she could have the votes necessary to secure the chair when the board votes in February.

“I think it would be a great honor,” she said.

Ma said Jan. 27 she doesn't presume she has three votes, but will see in February if she does.

“But if called upon, I would gladly assume leadership of this board and will work hard to improve transparency, accountability and improve our relationships with the Legislature, [Department of Finance], [Department of General Services] and other agencies.”

To contact the reporter on this story: Laura Mahoney in Sacramento, Calif., at lmahoney@bna.com

To contact the editor responsible for this story: Cheryl Saenz at csaenz@bna.com