Franchise Tax Board:
Board Seeks More Funding for Existing Auditors

The Franchise Tax Board voted September 7 to ask the state to add $7.8 million to the agency’s 2017-18 fiscal year budget to cover the FTB’s increasing audit costs. FTB staff said the money is needed on an ongoing basis, and would help the agency deal with the increasing complexity of audits.

The funds would not be used to add new positions, the staff testified. 

The board voted 2-0 to approve the budget request. Voting in favor were State Board of Equalization Chair Diane Harkey and State Controller Betty Yee.

Eraina Ortega, chief deputy director of the California Department of Finance, representing Finance Director Michael Cohen, abstained because the request is being made to her department.

Deputy State Controller Yvette Stowers, who often represents Ms. Yee at the FTB and on the BOE, was a non-voting participant in the meeting.

By the same 2-0 vote, the board approved budget requests for $2.5 million for 20 permanent information technology positions to replace temporary positions that expire in 2018, and $5.9 million per year for 29 positions to enhance existing data security operations.

If approved by the Department of Finance, the requests will be included in the governor’s budget, which is required to be submitted to the Legislature by January 10.

In other action from the meeting, which lasted exactly one hour:

Closed Session Canceled. The meeting agenda included a closed session to discuss four cases involving the FTB and Nevada inventor Gilbert Hyatt, but the board adjourned without going into the closed session. Mr. Hyatt’s appeals for the 1991 and 1992 tax years were heard August 29 by the State Board of Equalization, and he prevailed on most issues.

Two Big Contracts Approved. The board voted 3-0 to approve two contracts:


FTB Employees Impacted by Hurricane Harvey. The FTB has 42 employees in Houston, and five were impacted personally by the recent hurricane that hit the area, Ms. Stanislaus said. The employees were not injured, but some lost their homes, she said. One of the workers whose home was flooded stayed upstairs performing FTB work while waiting for help, she told the board.



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