The Round-Up of California’s Wasted Taxpayer Money
By Jon Coupal, Howard Jarvis Taxpayers Association
Anyone who has ever managed a household knows that it is not only how much money you make that matters. It is also how much you spend. California’s budget is vastly more complicated, and less transparent, than family finances. So, it is even more important for taxpayers to watch closely as elected officials spend our money. The Howard Jarvis Taxpayers Association has found that, in many instances, California’s budget is a catalog of careless, excessive, and wasteful spending, or, as some might have it, business as usual.
For example, the Department of Motor Vehicles had years to prepare for the launch of the national “Real ID,” but failed to do so. The agency was rewarded with an additional $242 Million in new spending to try it again. State Auditor Elaine Howle found misuse of state resources in county fair funds, documenting $318,000 in misspent funds, including more than $30,000 for “excessive and unauthorized travel expenses,” lavish dinners and alcohol. In another audit, State Auditor Howle discovered that the California State University system hid $1.5 Billion in an outside account to spend on operating costs, while raising tuition almost yearly and asking the Legislature for more funding. CSU has nearly doubled tuition from 2008 to 2018.
The Office of Inspector General discovered in an audit of Medi-Cal that the California Department of Health and Human Services failed to compare their Medi-Cal eligibility list with the California Master Death File or to crosscheck Social Security numbers with the Public Health Department. As a result, the state made $70.9 Million in payments for people who were deceased. The IG report found that in a sample of payments for 184 patients, all but six were dead. In January, another audit of Medi-Cal found that while taxpayers provided funds to test 1.4 Million babies and toddlers for toxic lead exposure, the testing was never done. The State Auditor reported last July that 33 state agencies had weak or no security standards to protect personal information such as Social Security numbers, addresses and financial information.
Caltrans spent $13 Million that should not have been spent, according to an audit in December, including $7.4 Million that was borrowed from investors to fund transportation projects. In its own defense, Caltrans said none of the unauthorized spending came from the increase in the gas tax. They are wasting money from the previous taxes if that makes you feel any better. Even the unprecedented pandemic soon became a path into the usual swamp of waste. In April, Governor Gavin Newsom made a secret deal to spend $1.0 Billion on masks made by the Chinese electric vehicle company BYD. Some of the money was refunded in May when the firm was unable to gain the needed safety certification in time to meet the delivery deadline. The governor said there was a “little bit” of a delay because the masks were a new product that the company had not manufactured before.
Some critics wondered why California didn’t help to set up mask manufacturing in the state, saving money and employing out-of-work Californians, or why the state hadn’t simply contracted with a firm such as 3M, an established manufacturer of N95 masks. Instead, California struck an $800-Million deal with Bear Mountain Development Co., LLC, in May. The company’s president was former Alabama Attorney General Troy King. The company’s local contact in California is a lobbyist in Sacramento. Bear Mountain was supposed to deliver 120 Million surgical masks and 60 Million face shields before May 2, but when only 9.7 Million surgical masks and just 489,000 face shields were delivered, California officials canceled the contract.
Another highly questionable mask deal was reached with Blue Flame Medical LLC, a company that had been in business for just days when California wired nearly $500 Million to the firm to purchase personal protective equipment. The firm was founded by two Republican political operatives who decided to get into the PPE business when the pandemic began. The state canceled the contract and had to claw the money back.
All the examples of wasteful and reckless spending in the Howard Jarvis Taxpayers Association’s “Follow the Money” report, and were gleaned from official audits and media investigations. The report is available online at www.HJTA.org/followthemoney and can be downloaded or printed. And after you have read it, it makes a great dartboard. The challenge is to hit a spot that does not show at least $100 Million of wasted tax money.
Jon Coupal is President of the Howard Jarvis Taxpayers Association. The opinions expressed in this article are those of its author and not necessarily those of the Apartment Association of Greater Los Angeles. This article is being reprinted with permission from the Howard Jarvis Taxpayer Association and the author.