How California taxpayers weathered the pandemic (Opinion)
While few Californians weathered the pandemic unscathed, taxpayers took a particularly heavy hit, getting stuck for the long-term cost of relief payments, bailouts and fraud while losing earnings during the “two weeks to flatten the curve” that turned into two years.
If we had known in early 2020 what we now know, it is doubtful we would have shut down the economy as tightly as we did and we certainly would have taken greater caution about our response to school closures and educating our children. Only now are we starting to comprehend that damage to child development, socialization and learning.
Taxpayers also took a hit by having to pay taxes and fees for services not received. Local governments required restaurants to continue to pay various licensing fees even when they were forbidden to be open for business. Parks, libraries and other public venues were closed to the public while citizens continued to get the tax bill to support those same facilities. Efforts by taxpayers and businesses to seek temporary relief from government exactions were mostly met with open hostility, while members of public-sector unions continued to receive paychecks and, in some cases, got raises even when they weren’t going to work.
But by far the biggest hit on California taxpayers during the pandemic was the jaw-dropping levels of waste, fraud and abuse of taxpayer dollars. On Gov. Gavin Newsom’s watch the Employment Development Department failed to process a backlog of claims for hundreds of thousands of unemployed Californians while sending out as much as $30 billion in unemployment benefits for phony claims, including fraudulent claims paid to death row inmates.
What is particularly galling about the EDD fraud is that the state had plenty of warning. In May 2020 the United States Secret Service alerted EDD that organized criminals were exploiting weaknesses in the systems to steal taxpayer monies. But nothing was done.
Then there is the scandal of costly no-bid contracts, including one for nearly $1 billion with a China-based firm for N95 masks that even a senior Democratic lawmaker called “murky.”
The state’s handling of public funds during the pandemic was the subject of a High Risk Audit Report last August by then-state auditor Elaine Howle. The report concluded that billions of dollars were wasted by giving money to people who were not entitled to receive the funds, while many people who needed relief from the pandemic were not getting it.
“Because a significant amount of the federal COVID-19 funding was directed at federal programs that provide assistance to individuals who are not working or have low incomes, failure by the departments that implement these programs to engage in adequate outreach efforts could have left Californians without medical care or money to pay for housing and food for themselves and their families,” the auditor’s report states. “Furthermore, departments have faced significant hurdles in managing federal COVID-19 funds, such as monitoring subrecipients or vendors, creating a high risk for inefficiencies and waste.”
The list of harms inflicted on taxpayers discussed above is by no means exhaustive. For example, at the federal level an argument could well be made that the trillions in “COVID relief” spending — much of which was pure pork — have given us the record-high inflation we have today. Inflation hits middle- and low-income individuals the hardest, raising the cost of goods and services and devaluing every dollar that has been saved.
Inflation is the worst taxpayer rip-off of all.
Jon Coupal is president of the Howard Jarvis Taxpayers Association.
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