Op-Ed: State Senator investigates California taxpayer donations Special

Posted Dec 11, 2015 by Jonathan Farrell
At this time of year when people tend to be more generous, it is disconcerting to learn that some charitable donations don't get distributed. This was at the heart of California State Senator Robert Hertzberg's committee hearing on Wed. Dec. 9th.
 Our job is to fix it   said CA State Senator Robert Hertzberg. He called together a committee heari...
"Our job is to fix it," said CA State Senator Robert Hertzberg. He called together a committee hearing on Wed. Dec. 9 to talk about the more than $4.5 million per year that is collected from California Taxpayers by way of their tax returns each year, wishing to give to a selected charity. This past August, the AP reported that more than $10 million collected has been going back into the general fund unused.
Ray Sotero, courtesy of CA State Sen. Robert Hertzberg's office
As a Democrat, he serves District 18 which includes Van Nuys, CA, he represents over 1 million residents of the San Fernando Valley. He began the hearing by holding up a 540 tax form explaining that the check list of charities for tax payers to donate to has made it easy and convenient for Californians to make a thoughtful donation with their tax returns.
Yet when Hertzberg said he was told by AP reporter Don Thompson that many of the charities listed have not received any designated donations, Hertzberg, promised he would do something about it. According to the AP's investigative findings, by then reporter Fenit Nirrapil back in August of this year, almost $10 million dollars in charitable money from tax payers sat unspent. The AP exclusive which was dispersed to the San Diego Union-Tribune and others, said that for a decade 29 funds on the 'check off list' had collected $35 million since 2005.
"This 'check-off list' as Hertzberg called it, of charities and non-profit organizations for tax payers to donate to has been in effect since 1982. He noted that initially there was over 50 on the list. But that "18 are still active." Charitable money not distributed went back to the state's general fund. Hertzberg said he wanted to know why and that in some instances it took three years for donated money to go to the selected charity by a taxpayer.
At Hertzberg's side on Wednesday at the committee hearing was CA State Senator John Moorlach. He represents the 37th District which covers much of Orange County. At the hearing that morning at a conference room at The California Endowment in downtown Los Angeles, he pointed out he has years of experience as a CPA and Financial Planner.
"If the report by the AP is accurate this is bad news," said Moorlach. He talked with this reporter by phone the day after the hearing. "What is frustrating is that other than legislative representatives no one (official) from the Franchise Tax Board was present to speak."
Thompson as reporter for AP was present and he wrote, The AP found that nearly $280,000 that was supposed to be spent on asthma and lung disease research was never allocated by legislators or public health officials. At Wednesday's hearing, an education official disputed that nearly $90,000 intended to aid disadvantaged youth went back to the state's general fund and said the department still hopes to distribute the money.
Moorlach said more than once he was pleased that the press was taking interest in this situation. "It makes you wonder, who runs (the state government in) Sacramento?" While Moorlach did say that the Controller for the State of California, Betty Yee should have some sort of system in place to deal with things like this, "Welcome to Sacramento!" "There is no CFO or CEO for our golden state," he added.
Hertzberg said at the committee hearing what his team found out going through information "painstakingly." "Some of the money collected went directly to well-known charities like The American Red Cross for example. But "in other instances when a taxpayer selected a cause such as asthma or lung disease research, the money went through a process to various departments." And, here according to Hertzberg and his team, is where things go wrong.
"The Attorney General has a diligent process in place when it comes to these types of donations," said Hertzberg. "We here in the State of California must (strive) to have the same," he added.
Moorlach agreed as he again noted with his CPA and financial background of expertise "there shouldn't be a new bureaucracy, he said, to handle something that is no big stuff." During his more than 22 years in finances and public office, he has witnessed a lot. For example, when Orange County Treasurer-Tax Collector Robert Citron’s risky investment strategies lead to bankruptcy. Moorlach's urgings for caution as we could see what was coming, were ignored. Yet, as he had surmised, in 1994, Orange County went into bankruptcy. Becoming, at that time, the largest municipal bankruptcy in U.S. history.
Overall, Moorlach said he thought the committee hearing went well. "Bob (Hertzberg) was well prepared (with the topics discussed) and went over 13 areas of needed improvement." Moorlach spoke frankly when he said, "the hearing did not resolve anything. But I think it helped set a (possible) template for the future."
Hertzberg said that money going to various departments "never should have," especially money that was clearly dedicated to a selected charity by the taxpayer. He reiterated several times this is clearly a situation to be fixed; "and we are going to fix it." To learn more about California State Senator's commitment to fix the "check off" taxpayer donation situation, visit his web site.