As it did with citizens throughout America, the pandemic caused massive disruption to the lives of virtually every Californian. Tens of thousands lost their lives, many now have long-term health problems, and countless others lost their jobs or businesses. Moreover, the disastrous handling of the pandemic for school-aged children will likely leave a scar on an entire generation that may never heal.
More unique to California, however, is the extent of government waste associated with the pandemic. Outright fraud, mismanagement, opportunistic consultants, ineffective media campaigns, and simple incompetence put California way ahead of all other states in felony-level stupidity with the spending of taxpayer dollars. Because this is a column, not a book, we can only review a few of the most egregious examples.
Of course, the big Kahuna is the jaw-dropping amount of fraud in the Employment Development Department (EDD). Originally thought to be “only” $11 billion in “improper” payments, we now know that the fraud exceeded $31 billion. To put that in perspective, that is 10% of the entire budget for the state of California. More insulting is where the money went. Transnational organized criminal groups from China and Africa have made off with billions of dollars, with who knows how much of it was used for child trafficking, drugs, and terrorism.
A close second, the waste and incompetence of California’s public education establishment probably engendered more anger, especially among parents, than even the EDD debacle. Taxpayers were obligated to continue paying their full taxes as though our public schools were fully open with students attending in person. The public employee unions were running the show during the pandemic and that was bad news for both taxpayers and students.
According to a report last July, California school districts had spent $40 billion in COVID-related funds, but very little went to addressing learning loss. That may be due in part to the failure of the federal government, to specify with more particularity, how the money should be spent. According to EdSource, “Most districts appear to have listed most of the money they spent in [an] all-but-the-kitchen-sink category, which could include raises and bonuses to retain staff.” Finally, there remain billions more in unspent funds at the same time public school enrollment has plummeted in the state.
Not all of the waste was the result of fraud or negligence but rather a simple miscalculation of the severity of the pandemic.
One example of COVID spending “overkill,” was the conversion of Sacramento’s professional basketball facility, then called Sleep Train Arena, into a COVID hospital in April 2020. According to the L.A. Times, the conversion cost millions of dollars and yet only nine patients were treated there.
Far less justifiable than an arguably good-faith response, was by sending a massive hospital ship to L.A. “just in case,” was Gov. Gavin Newsom’s decision to spend almost $1 billion in taxpayer funds to purchase masks from a sketchy Chinese company, known for building electric cars. Two years after the fact, there remain many unanswered questions.
Finally, California had a golden opportunity to use some of the billions in federal COVID relief to pay down its debt to the Federal Unemployment Insurance Fund. That is precisely what virtually all other states did. But California’s failure means much higher costs to the state’s business community.
Taxpayers would like to hope that government agencies learned much from the pandemic. So far, there’s no indication of it.
Jon Coupal is President of the Howard Jarvis Taxpayers Association – California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights. For more information, visit www.hjta.org.