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Contributors
Chuck DeVore- Contributor
Assemblyman Chuck
DeVore represents 450,000 residents of Orange County
California’s
70th Assembly District.. He served as a Reagan White House
appointee in the Pentagon from 1986 to 1988 and was Senior
Assistant to Cong. Chris Cox. He is a lieutenant colonel in the Army
National Guard. Chuck’s novel, CHINA
ATTACKS, sells internationally and has been translated
into Chinese for sales in Taiwan. [go to DeVore index]
 Footing
The Bill
Taxpayers
pay for housing subsidies for 1,800 state employees...
[Chuck DeVore] 6/16/05
Bureaucracy
is not well known for policing itself. In pursuit of its mission,
self-described as always a noble one, it often
casts aside common sense. The justifications developed for its
actions can be humorous, especially when they are delivered with
a straight face by an earnest departmental spokesperson.
California is home to about 330,000 state employees. On a per
capita basis, this is actually below the national average, but
civil servants in California earn more than the average state
taxpayer and they enjoy generous retirement packages. Of these
330,000 government workers, some 1,800 enjoy an additional benefit:
subsidized state housing.
From prison wardens to California Highway Patrol officers in
remote locations, some of these public servants would, at first
blush, appear to be serving in hardship posts deserving of perks
like low-cost housing.
Unfortunately, anything
resembling consistent logic in the pricing and use of state
employee housing seems to have long been forgotten
by the system. This has led to a surprising array of rental policies.
For example, some state park rangers pay $148 a month to live
in newly restored, million dollar, three-bedroom cottages right
on the Pacific Ocean in Orange County. Contrast this with employees
who care for aged veterans in the remote desert town of Barstow
who, subject to room availability, pay $10 per night ($300 per
month) for the privilege of staying overnight in a tiny room
in the veterans’ home where they work.
Of course, it is not supposed to be this way. In 1994, Gov.
Pete Wilson issued an executive order requiring agencies to determine
fair market value for the housing they provide for their employees.
In 2003, Gov. Gray Davis ostensibly followed up with a similar
order. Even government employee union contracts stipulate that,
if provided housing, they may have to pay fair market value.
California’s Department of General Services manages the
state’s office buildings and housing. It determines housing
fair market value based on factors such as age and size of the
house and rental value of nearby private properties. The trouble
with implementing this policy is that individual agencies are
then able to discount as they please from the calculated fair
market value.
The Department of Parks and Recreation compounded this arbitrary
discount with an added bureaucratic fiat. Three years ago, they
sought the authority from the Department of General Services
to make their own fair market value calculations. They then proceeded
to claim that, since they were not allocated any money for that
purpose, they were unable to make the calculations they asked
to make!
Sadly, California’s
slipshod administration of its housing subsidies may trigger
a sizable Federal tax liability for some
unsuspecting California state employees who enjoy an in-kind
housing benefit. IRS rules state that unless the employee must stay in the house as a condition of employment (for instance,
a lighthouse keeper), they may have to pay income tax on the
value of the subsidy. Currently, fewer than 300 employees have
their housing allowance subsidy reported to the IRS as taxable
income. This leaves about 1,500 state workers potentially at
risk in a tax audit. Many of these employees enjoy a tax-free
housing benefit worth more than $30,000 a year. This is a great
perk, until the tax man comes calling. CRO
copyright
2005 Chuck DeVore
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