Bill Leonard - Contributor
Bill Leonard is a Member of the State Board of Equalization
Week Under the Dome...
Golden Fleece, Econ 101 and Household Survey Divergence..
[Bill Leonard] 12/27/04
When I was a legislator
I gave Golden State Fleece Awards to state agencies that wasted
taxpayer dollars. I had a trophy,
but no recipients ever wanted to claim it. Sadly, it is now appropriate
that it still sits on my office shelf because the Board of Equalization
is greatly deserving of it. More than two months ago I opened
my district office in Ontario. (Just a refresher on the math:
I was sworn-in during January of 2003. The BOE and the state’s
Department of General Services finally secured southern California
district office space for me in October of 2004. The magnitude
of that inefficiency far exceeds my Golden State Fleece Award.)
When we moved into the office, my staff ordered power strips
and trashcans—hardly unusual requests for a new office.
Tuesday of last week the power strips finally arrived by priority
shipment. The enclosed invoice showed that the Board paid $22
each for the power strips. It took my staff about 30 seconds
on-line to find the exact same item for $12.99. So we waited
two months and paid nearly double to get items my staff could
have obtained at the local office supply store. This is the insanity
of the state’s procurement system and I hope the Governor
is able to accomplish the desperately needed reform in this area.
By the way, as of this writing, we still do not have trashcans.
Rule 138 Update
In a surprising, unanimous vote in favor of the taxpayers, the
Board of Equalization recently defeated a proposed amendment
to eliminate the property tax exemption for aircraft being repaired
in California. By this vote, the Board sent a strong message
that California is willing to fight to keep aviation jobs in
The California Assessors
Association had proposed a revision to the exemption rule that
would have subjected far more airplanes
to property taxes, perhaps all of them. Fortunately, the Board
heard ample testimony about the economic disaster this regulatory
change threatened to cause. Local governments and industry representatives
were there to explain how any attempt to collect property taxes
would cause the planes to leave the state, especially since ALL
of our neighboring states are more taxpayer-friendly in this
regard. The desert communities where most aviation repair facilities
are located could have become virtual ghost towns. In addition
to the social costs of destroying an industry, state and local
treasuries would have suffered tremendously, with little or no
offsetting gain from increased taxes, since most aircraft were
expected to leave to avoid the property taxes. Perhaps this decision
was a result of the realization that this is one industry that
literally can pick up and fly away. The truth is there are very
few industries that have to be based in California. A state’s
business-job climate does make a difference.
More Economic News for the Holidays
More interesting news from the Federal Bureau of Labor Statistics.
Their December release shows a great divergence between the household
survey numbers and the survey that tracks company payrolls. The
payroll method is also called the establishment survey; this
has long been the most widely trusted number. The establishment
survey indicates we only created 112,000 jobs during November.
According to the household survey, which relies on calling households
and asking people if they are working or seeking work, 439,000
new jobs were created in November. What accounts for this divergence?
Consider that the payroll survey does not count independent
contractors, or others who are self-employed, the household survey
may be more accurate. There is a growing chorus of economists
who believe the payroll survey is losing track of workers because
it is not capable of tracking the explosion of self-employment
made possible by technology. More and more people are finding
ways to shun the kind of traditional work roles the payroll survey
tracks. A summary of the federal data is available here. CRO