1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 JANUARY 27, 2011 9 OTHER ADMINISTRATIVE MATTERS 10 P7 EXTERNAL AFFAIRS 11 DEPUTY DIRECTOR'S REPORT 12 13 14 15 16 17 18 19 20 21 22 Reported by: Juli Price Jackson 23 No. CSR 5214 24 25 26 27 28 1 1 P R E S E N T 2 3 For the Board Jerome E. Horton of Equalization: Chairman 4 5 Michelle Steel Vice-Chairwoman 6 7 Betty T. Yee Member 8 9 George Runner Member 10 11 Marcy Jo Mandel Appearing for John 12 Chiang, State Controller (per 13 Government Code Section 7.9) 14 15 Diane G. Olson Chief, Board 16 Proceedings Division 17 18 For the Board: Anita Gore Deputy Director 19 External Affairs 20 21 Kari Hammond Manager 22 Outreach Services Division 23 24 25 ---oOo--- 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 JANUARY 27, 2011 4 ---oOo--- 5 MR. HORTON: Ms. Olson, what is the next 6 matter? 7 MS. OLSON: Our next item is P7, External 8 Affairs Deputy Director Report, P7.1, 2011 Annual 9 Outreach Plan and Budget. 10 MS. GORE: Good afternoon. 11 MR. HORTON: Good afternoon. 12 MS. GORE: I'm Anita Gore, Deputy Director of 13 the External Affairs Department. 14 With me today is Kari Hammond, Manager of the 15 Outreach Services Division. 16 Before you today is in the Outreach Services 17 Division plan for 2011 and a review of outreach events 18 held in 2010. 19 Outreach events offer an opportunity to 20 personally touch taxpayers for education purposes. This 21 results in better educated taxpayers, increased 22 voluntary compliance, improving the collection of taxes 23 due. 24 The BOE offers many outreach opportunities for 25 taxpayers and not all of them are supported by the 26 Outreach Services Division. For example, the Taxpayer 27 Rights Advocate participates in events independent of 28 OSD. In addition, the Sales and Use Tax Department 3 1 offers many sales and use tax classes at field offices 2 that are not supported buy Outreach Services. We have 3 included information about these efforts because they 4 are outreach and do serve many hundreds of taxpayers. 5 In total in 2010 BOE participated in or 6 sponsored 368 events. Those include speaking 7 engagements and sales and use tax classes. A total of 8 23,000 taxpayers attended these events. 9 Outreach Services Division had complete 10 oversight of 23 BOE-sponsored events and arranged for 85 11 speakers Bureau requests. 12 OSD was also involved in the cigarette tax 13 classes that were given throughout the State. 14 Included for the plan -- in the plan for 2011 15 are 476 total outreach events, speaking engagements and 16 classes. This represent 108 additional outreach 17 opportunities in 2011. OSD will help coordinate 180 of 18 these. 19 In 2010 there were 16 small business seminars 20 sponsored by the Board and seven nonprofit seminars. In 21 2011 the Board has asked OSD to plan 36 small business 22 seminars and 10 nonprofit seminars. 23 A breakdown of those requests is included in 24 your report. This represents a 100 percent increase in 25 planned Board-sponsored events. 26 Outreach Services has worked over the past 27 couple of years to significantly reduce the costs of 28 BOE-sponsored events coordinated by Outreach Services. 4 1 That's allowed us to produce more events while 2 maintaining the same budget level. Costs have been 3 reduced by about 50 percent since 2009. 4 The current BOE cost per event for 2011 is 5 estimated to be $3735. This is primarily for travel, 6 postage and print costs and program staff costs and does 7 not include costs of other State departments. 8 Reductions in costs have resulted from the 9 elimination of venue and equipment rentals and reducing 10 the amount of postage by depending more on e-mail and 11 reducing travel costs by scheduling event more 12 efficiently and reducing the number of staff who travel. 13 While we've been doing more with less, the 2011 14 plan is very aggressive and will require that Outreach 15 Services Division to fully staff up, filling a currently 16 vacant position and also bring on a retired annuitant in 17 order to handle the additional workload. 18 In addition to the in-person seminars, Outreach 19 Services Division concentrated in 2010 on making 20 available online all those materials presented at 21 in-person seminars. That effort has been completed and 22 in 2010, online seminars received almost 395,000 hits. 23 The most popular online educational product is the 24 e-file tutorial, which received more than 350,000 of the 25 total hits. 26 Data regarding the online products hits 27 information show that for most of the online videos only 28 a minimal amount of time was spent at each visit -- only 5 1 a minute or two on average. The e-file tutorial, on the 2 other hand, is generally watched for its entire eight 3 minutes. 4 The online educational products have proven to 5 be a very efficient way to reach taxpayers who need 6 specific assistance in e-filing a return. 7 In 2011, OSD will continue to develop online 8 products to assist our taxpayers. Some of the new 9 products will include existing products produced in 10 other languages. For example, the sales and use tax 11 seminar will be translated and produced into Mandarin 12 and Korean. OSD will also create offerings to explain 13 use tax and educate taxpayers on the appeals process. 14 There's much more information included in the 15 plan you have in front of you. It was my goal today to 16 summarize Outreach Services events and other efforts 17 that we use to help improve voluntary compliance with 18 our tax laws. 19 Thank you. And if you have any questions, Kari 20 and I are happy to answer them. 21 MR. HORTON: Thank you very much. 22 Discussion, Members? 23 Member Yee? 24 MS. YEE: Thank very much, Mr. Chairman. 25 Thank you, Ms. Gore for the summary. I had 26 asked that this be placed on the agenda for a couple of 27 reasons. One, with Mr. Runner joining the Board, I 28 wanted him to have the opportunity to look at our 6 1 overall outreach plan. 2 I think you had made an inquiry earlier of the 3 executive staff and I really appreciate the thoroughness 4 with which this plan was presented to us. 5 Secondly, I just wanted to be sure that we 6 continued to be mindful with respect to our constrained 7 resources about how we continue to provide information 8 and do outreach with our taxpayers. 9 I am heartened by the statistics relative to 10 the online products that we're offering. I don't know 11 what to make of the kind of short time visits by some of 12 the hits that we are seeing, but it does actually feel 13 very good that those who are visiting the e-file 14 tutorials are looking at those in its entirely. So, I 15 think that is going to be of tremendous help. 16 The other thing I would say about this is even 17 though the costs have gone down -- and I appreciate this 18 because the venue costs were certainly prohibitive in 19 terms of the ability to bring certain seminars out to 20 different areas of the State -- that we do continue to 21 look at partnerships that we can form. We have done a 22 lot of that already, but continue to do that with other 23 organizations that are doing outreach to a similar 24 population that we're trying to reach as well so that we 25 can continue that and look at how we minimize our costs. 26 I do think that we have a potential optics 27 problem with continuing do the volume of seminars that 28 we do. It's a balance. We want to be sure taxpayers 7 1 get the information. I'm not thrilled about the 2 expenditures that we are continuing to accrue with 3 respect to how we put on the seminars. 4 I would think during a time like this that we 5 would want to be mindful about the numbers of in-person 6 seminars, particularly since it looks like we're 7 reaching, what is it, just a little over 20,000 -- 8 23,000 are attending these events. 9 Is that -- 10 MS. GORE: Yes. 11 MS. YEE: Which is a pretty small percentage of 12 who we're trying to reach. 13 So, but thank you, I appreciate the 14 presentation. 15 MR. HORTON: Thank you, Member Yee. 16 Further discussion, Members? 17 MS. STEEL: I just want to thank the -- 18 MR. HORTON: Member Steel. 19 MS. STEEL: -- to this group because we just 20 started this year, we already set for two in my 21 district, actually one with you and Chairman Horton's 22 district together. 23 And every time that -- after we have seminar, 24 they really appreciate that we reach out. And they -- 25 you know, they see that. They always -- especially 26 Californians, that, you know, they look at us as a tax 27 collector. 28 But when we go out to small business owners and 8 1 try to help them and Taxpayers Advocate Group goes out 2 and then they'll always appreciate that, you know, we 3 try to reach them and at the same time we get a lot of 4 good responses. 5 So, you know, doing good job. And thank you 6 very much for what you are doing. 7 MR. HORTON: Further discussion, Members? 8 MR. RUNNER: Just real quick, my observation 9 would be that these are important outreaches for us to 10 do to get our goal of compliance. My -- observing this, 11 you know, it's -- you know, what we're projecting for 12 this current year versus two years ago is a -- three 13 times the amount of seminars, with basically what -- at 14 least what you're projecting here, is the same amount of 15 resources, which is, actually, obviously, very good, 16 very efficient. 17 My concern is, however, that we need to be 18 clear that if, indeed, we are incurring more costs and 19 these are worthy of those costs, getting people to 20 comply, then we need to be prepared then to go ahead and 21 whatever budget adjustments we need to. It's not fair 22 to staff, at that point to have a really high 23 expectation in terms of trying to do more and more of 24 these and then have them keep putting them in smaller, 25 smaller, you know, box in regards to what their 26 resources are. 27 If they're valuable, then we need to address 28 them as valuable. Because, again, it's not so much the 9 1 cost that I think should be our concern, because, 2 ultimately, this is about compliance. And, you know, if 3 we're going to look at one side of cost, then we ought 4 to look at the other side of the cost. What's the cost 5 of noncompliance in that discussion? 6 But at the same time I would hope that at this 7 point, if all of a sudden the demand for Members gets to 8 the point to where it's beyond what it is a reasonable 9 expectation to what staff can do and prepare, then we 10 need to be -- we need as -- we, as a board need to be 11 able to prepare that or deal with that so that we 12 take -- so we staff appropriately to meet our -- our 13 goals. 14 MS. MANDEL: Mr. Chair? 15 MR. HORTON: Thank you, Members, Ms. Mandel and 16 then Miss Yee -- Ms. Steel. 17 MS. MANDEL: You know, the Controller's very 18 supportive of outreach. Everybody, I am sure, has heard 19 us say and remembers if they have been around a long 20 time, he started the seminars here and started the 21 Outreach Division to try to get them more centralized 22 and officially run. He has always done a lot, even when 23 he was on the Board of Equalization through the use of 24 the staff members assigned to his office for planning 25 purposes and, you know, getting sites and doing the 26 agendas and doing the -- getting all of the information 27 out to the people and taking the reservations and even 28 to the extent, I understand, when he was here, having 10 1 people who could put on some parts of the presentation, 2 depending on what it was what they were presenting. 3 You know, the -- it seems sometimes that we get 4 real focused on costs when -- when times are harder. 5 You know, there is a thing that I say myself a lot and 6 so I can't attribute this phrase to him, but I often 7 will say to people, "Well, I'm a taxpayer too." 8 And, you know, every -- urging, sort of fiscal 9 responsibility and fiscal restraint is something that we 10 think is important every day of every year, regardless 11 of, you know, what the current budget situation is -- 12 good or bad or indifferent. 13 And, so, what he would like to urge is 14 continued attention to the costs, finding ways to be 15 more efficient in doing them, you know, in the best way 16 that we can. He -- I have said it before here that the 17 belief in seminars, which Mr. Runner alluded to, is that 18 if you get people to understand it on the front end, 19 they're not going to have to pay for misunderstanding it 20 on the back end. 21 But I think the Controller also feels that, you 22 know, I am will not real close to exactly how all of 23 it's run, but he did stress how he uses his staff and 24 continues to use his staff in planning. And, you know, 25 I would encourage Members' offices, to the extent 26 they're not involved -- and I can't say whether they are 27 or not and trust that they are involved to the extent 28 that they can be -- but that they be involved in the 11 1 process and assist the staff in terms of handling some 2 of that material. 3 Because it is Member services as well as a 4 Board service outreach to taxpayers. 5 Thank you. 6 MS. STEEL: You know, actually cost went down 7 and we are doing more seminars because it's hard work 8 from the staff from BOE. 9 I see that, you know, we do back to back like 10 Kari and Todd Gilman sitting there. And then we have a 11 lot of staff actually staying more outside of their home 12 trying to do all of the seminars at the same time. So, 13 we are actually saving a lot of cost for this and doing 14 many, many more. 15 You know, I really don't know how to say except 16 just thank you, doing great job. And, you know, every 17 time I go out to these seminars, I see 4 or 500 people 18 sitting there, eager to learn the new laws and new 19 regulations. 20 And they are doing a wonderful job. Thank 21 you. 22 MR. HORTON: Thank you, Members, for your 23 input. 24 I thought Miss Hammond had to put -- was one of 25 three, somehow, do you have triplets somewhere? 26 MS. HAMMOND: I'm blessed to have a wonderful 27 staff here at headquarters that does all the support 28 work. 12 1 MR. HORTON: All right. Thank you for your 2 input. 3 Thanks for the presentation. 4 ---o0o--- 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 1 REPORTER'S CERTIFICATE. 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, JULI PRICE JACKSON, Hearing Reporter for the 8 California State Board of Equalization certify that on 9 JANUARY 27, 2011 I recorded verbatim, in shorthand, to 10 the best of my ability, the proceedings in the 11 above-entitled hearing; that I transcribed the shorthand 12 writing into typewriting; and that the preceding pages 1 13 through 13 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: MARCH 15, 2011 17 18 19 ____________________________ 20 JULI PRICE JACKSON 21 Hearing Reporter 22 23 24 25 26 27 28 14