SACRAMENTO — Judy Chu's election to Congress on Tuesday after more than two years on the state tax board could change the balance of power on the panel, which can affect corporate taxes to the tune of millions of dollars.
Her now-vacant board seat gives California's business lobby a coveted opportunity for more influence on its decisions, especially if Gov. Arnold Schwarzenegger, a longtime ally, makes a business-friendly appointment to replace her, as he is expected to.
The tax board's decisions can have major consequences for industry; its wide-ranging actions include determining which companies are eligible for California's myriad corporate tax breaks, and raising taxes 16-fold on fruity and fizzy "alcopops."
Consumer advocates hope for a liberal in the mold of Chu to fill the seat.
Lenny Goldberg, executive director of the California Tax Reform Assn., said only special interests pay close attention to the tax board -- "generally corporate interests that are trying to get their way with millions of dollars."
Liberal Democrats have dominated the five-person Board of Equalization in recent years, but Chu's exit leaves the panel evenly split between two conservatives and two liberals. Whomever Schwarzenegger picks would be the swing vote.
"We will appoint a pro-taxpayer replacement very soon," said Aaron McLear, a Schwarzenegger spokesman.
With the nominee requiring confirmation from both houses of the Democratic-controlled Legislature, focus has been on business-friendly Democrats to represent the Los Angeles-area tax district. Topping the list are state Sen. Ron Calderon of Montebello and former Assemblyman Jerome Horton of Inglewood, according to lobbyists who are tracking the appointment process.
Also angling for the job is Chu's husband, Assemblyman Mike Eng of Monterey Park.
Chu's chief deputy, Steve Shea, will serve as the interim fifth board member until a nominee is confirmed. The next election for the post will be held in 2010. Because of the Board of Equalization's low profile, incumbents rarely lose bids for reelection.
Teresa Casazza, president of the California Taxpayers Assn., a business-backed group, said her organization wants a nominee who is "fair and open-minded and respectful of the position of taxpayers."
The California Chamber of Commerce declined to comment, as did many business lobbyists.
