The State of California is seeking an accountant and bookkeeper to oversee the payout of public funds for the next four years.
- Fiscal responsibility: Writes the checks for state government – about 49 million a year for employee pay, retiree payments, Medi-Cal, personal income tax refunds, and payments to vendors
- An eye for detail: Conducts independent audits of how state agencies spend their money
- Excellent coordination skills: Issues payments to local governments and schools, plus budgeting and accounting guidelines for all 58 counties and more than 4,900 special districts
- The ability to multitask: Serves on commissions including public land management and crime victim compensation; finance and oversight authorities such as the Franchise Tax Board; and on the boards of the nation’s two largest public pension funds
- Also safeguards unclaimed property: bank accounts, uncashed checks, insurance benefits, wages, stocks, bonds, and safe deposit box contents
About the hiring process:
Incumbent Betty Yee is termed out, which, in theory, breaks the field open. Democratic contenders include Malia Cohen, the party’s favorite and chairperson of the California State Board of Equalization; state Sen. Steve Glazer from Orinda; and Ron Galperin, the termed-out city controller of Los Angeles.
While it’s always a challenge for any Republican to win statewide office, policy analyst Lanhee Chen – who has worked on several high-profile U.S. political campaigns, including Mitt Romney’s 2012 presidential bid — hopes to sell voters on the idea that someone outside the majority party will be an effective check on the state’s finances.
The major applicants emphasize the position’s watchdog role, but also want to expand the job description. Chen says he would use the office’s bully pulpit to bring public attention to problems with state spending, while Cohen and Yiu say they want to advocate for equitable use of state money.
- American Independent
- Peace & Freedom
- No Party
Here’s where Lanhee Chen, Malia Cohen, Ron Galperin, Steve Glazer and Yvonne Yiu, applicants for controller, stand on the big questions about California’s budget, pensions and taxes.
While the state budget is awash in surplus cash, the nonpartisan Legislative Analyst’s Office and other watchdogs have repeatedly questioned whether all that money is being spent wisely or effectively.
The Employment Development Department, corrections agencies, the homeless initiatives. “I'd like to know if we're spending good money. Are we throwing good money after bad?”
“While the State Controller has no direct oversight of the state budget, the controller can perform independent audits of agencies…I believe this is the best way for the controller to ensure state money is being spent as efficiently and effectively as possible.”
Homelessness and housing programs, local agencies and special districts, K-12 schools. “Unfortunately we're seeing rather poor results in many school districts. And I think there's a real opportunity for the controller to look at how that can better operate.”
“Where the challenges are is pretty manifest given the amount of money, for example, we spend on K through 12, on issues relating to health care, whether it's Medi-Cal or IHSS or behavioral health care and mental health care.”
Education, homelessness, mental health. “I look to where the impacts are great, the numbers are high and the impacts are great. Certainly the $20 billion-plus fraud at the Employment Development Department does attract one's attention.”
Legislative hearings with all the stakeholders, audits. “And then I would come back and make public my findings and if there are recommendations, make the recommendations.”
Transparency, accountability through improved technology and online communication. “The State Controller can perform independent audits to investigate government waste or fraud.”
A “real-time” website showing how state departments are spending money. “Then you can use your auditing resources and the people that you have to not just do strictly financial audits, but to really do performance audits.”
“Let's be really precise about where the fraud is happening. In EDD, we know there was fraud and we know what the amount roughly is….Waste is a little tougher to quantify, because one person's waste is another person's treasure.”
“Making people be very clear that you're not going to get away with it, that you have the office of the controller that's going to be very diligent in tracking the expenditure, every public dollar, and we're going to hold people accountable, small and large.”
Even though the economy is rebounding from COVID, California still has among the nation’s highest jobless rates and hasn’t recovered all the jobs lost. Experts say the pandemic widened the gap between California’s rich and poor in some ways, despite unprecedented direct relief.
“No, I don't have a position on either one of the policy options….Just find a way… to get those checks to Californians as quickly and as efficiently as possible, ensuring that there isn't any fraud, any loss or anyone receiving money when they don't qualify.”
“I would support another stimulus payment, particularly to encourage economic growth….While the governor’s proposal isn’t perfect…it’s the best proposal to quickly get money into people’s pockets now while they are dealing with the rising cost of living and higher gas prices.”
Supports targeted relief to those most in need. “Just providing a one-time check because gas prices have increased is something that I don't think is necessarily well tailored enough.”
“My concern with one-time type solutions is precisely that they are one-time type solutions, that if the conditions persist we will be talking about six months from now another one-time solution, which doesn't get at the fundamental question of where's the flow of funds in the taxes and fees we charge on a gallon of gas right now?”
Supports Senate Democratic plan for $200 per person rebates for families earning less than $250,000 a year. “I think that's a prudent plan. It's focused on those who are most needy and those in the middle class, excludes the very wealthy.”
“I do believe that we are moving towards a gig economy. I do think there does need to be some sort of a restructuring of economic power and empowerment. Otherwise, I think that we will continue to see wage gaps growing, we will see a growing poor class.”
“The way we do business has changed and our current economic drivers are very different than when our tax structure was established. It’s time to consider changes to make sure we are taxing the right things in a service economy world.”
Possibly, but only if it doesn’t hurt businesses. “I think we definitely need to look at that change and some adjustments. We're in a different time. We're not in a 1950s economy anymore.”
“Okay, so do we have a tax system designed for the transition to a service-based economy? Probably not. And so we need to take a good, hard look at what that means for our state taxation system.”
“I don't think that's a realistic path going forward because what happens is… you're going to increase the tax burden on the low- and middle-income folks in our state to the benefit of the wealthy. And I think that's a very tough sell.”
“I have supported a wealth tax in the past, particularly coming out of San Francisco. and that wealth tax was more geared and centered around property….Voters passed an initiative that I was supportive of.”
“Yes. California has the largest income inequality gap in the history of our state. During the pandemic many Californians were losing their jobs and income, struggling just to get by, while billionaires just got richer. That’s wrong.”
“I'm not a big fan right now of seeing that put in place, especially if the numbers show us that people might decide to leave.”
“I do not. I believe if you look at our tax collections have increased year over year over the last several years, California has the revenue it needs to be a successful and good, compassionate state….I'm not even sure it's constitutional quite frankly.”
“We have a $68 billion surplus, okay. So what's the reason that we should tax more? I don't see a reason that we should be looking to tax more….I think we're pretty well taxed in the state.”
In the short term, Gov. Gavin Newsom and legislators are urging the state’s two huge public employee pension funds to divest from Russia over its invasion of Ukraine. In the longer term, CalPERS and CalSTRS both face huge amounts of unfunded debt, forcing them to consider riskier investments in search of higher returns.
“State employees that have worked really hard, teachers that have worked really hard, I do believe that they should be able to retire and to count on their retirement. But I don't think we can naively continue being blind and relying on the robust state government or the robust budget and the governor to continue to pay the unfunded liability.”
“How to reduce unfunded debts of local government is something I have already dealt with as mayor of Monterey Park….We can find ways to ensure our public pension obligations are met in California with smart investments that generate strong earnings and bonding opportunities that will save us money.”
Closely monitor investment returns, but not in favor of lower pension benefits for new employees. “When you create a two-tier system, you also create a lot of conflicts between those who just came in the door and those who have been there for quite a while. It also creates some real questions in terms of recruitment and retention.”
“We have made promises to state employees and teachers, we need to keep those promises. But we will be unable to keep them without, in my view, massive tax increases….Can we pay down some of those long term obligations? The Legislature's done a little bit of that to their credit, and the governor has agreed, but we need to be doing more.”
Supports lowering rate of return and possibly benefits for new employees after a certain date. “It's trying to not make worse an existing liability problem, and try to create a system that is actually sustainable for the employees and the employer going forward so that we don't have this liability trap of billions that only the taxpayers have to cover.”
“Divestment is always a hot issue, and it's an issue that I think that we have to be thoughtful and judicious about….There are many ways to begin to register your protests before a full divestment….I don't know how much money is invested into Russia.”
“Not only is divesting from Russian companies the right thing to do, it’s the smart thing to do from an investment perspective….When we saw what Russia was going to do, it would have been smart for CalPERS to divest in Russian companies because their value was always going to drop.”
Wants better definition of a Russian company and wants to make sure that oligarchs don’t gain from divestment. “First of all, let's not forget that the primary responsibility of those who are on CalPERS and CalSTRS is to actually make sure that they are the fiduciaries for those beneficiaries.”
“I believe as a general matter that these calls to divest in one thing or another are misguided…With specific reference to the situation in Russia I would favor some removal of state investment in those resources….First of all, it's a very small percentage of our total investments….And the notion that we are assisting the Russian war machine I think creates a fundamental national security challenge.”
“You would do an analysis to see whether or not that divestment would create any kind of financial shortfall for the fund in which you have a fiduciary to do that work. So that's a calculation, versus a black and white.”
“I don't have a deep understanding of exactly their pension strategy. I haven't met with anyone so I don't have anything to offer in terms of change today.”
“The CalPERS and CalSTRS boards have an obligation to ensure public employee pension investments are sound. There also is an obligation to make socially responsible investments.”
Wants to look at investments in private equity funds and also in clean energy. “That's a great way to actually move us forward in terms of getting off of fossil fuels and toward renewables, but also at the same time, making money for those who are retirees and soon to be retirees.”
“I don't have any specific recommendations at this time, but I believe one of the things a controller should do is take their role on both the PERS and STRS board seriously.”
“I think we want a sustainable system so that we can provide the benefits for the retirees and to do it in a responsible way. That's the frame in which I would enter that service.”