County, Fearful That Prop. 111 Will Fail, Devising Backup Plan

Fearful that Proposition 111, the gas-tax initiative, is doomed to fail in June, county officials have begun laying the groundwork for a November ballot measure asking voters to waive the government spending limit for a major flood control project, officials said Monday.

Should Proposition 111 pass, the spending limit would be waived for certain kinds of capital projects, the $1.4-billion Santa Ana River flood control project among them. The main intent of the measure, however, is to raise the state gasoline tax, and that has county officials worried that it will fail.

If it does, it could seriously set back funding plans for the flood control project, hence local officials’ effort to put together a backup plan.

“If we don’t get any Gann relief, we’re talking about losing about $200 million by the end of the decade,” said Tom Sacco, a county analyst helping to oversee the flood control project. “As a result, if Proposition 111 doesn’t pass, we intend to ask the Board of Supervisors to call an election in November to raise the Gann limit here.”

The spending limit known as the Gann limit was approved through an initiative by voters statewide in 1979. It puts a cap on government spending, based on a formula that factors in the national inflation rate and the pace of local growth. Voters must approve any decision to spend excess revenue; otherwise, the money must be returned to them.

In the case of the Santa Ana River project, the Orange County Flood District already has accumulated millions of dollars in property tax revenue, but it cannot spend all the money without voters’ approving a waiver of the Gann limit.

However, the possibility of a November ballot laden with tax issues--special levies for transportation, jail and courthouse construction, and open space all are under consideration--makes some observers wonder whether asking county voters also to waive a government-spending limit is not a recipe for disaster.

“I think the overriding concern of people today seems to be keeping government within its means,” said Tom Rogers of San Juan Capistrano, a slow-growth advocate who actively opposes Proposition 111. “The people of Orange County in particular would be very unlikely to vote for a waiver of the Gann limit.”

Although local officials would not be asking for more taxes to pay for the river project, the political and symbolic significance of the spending limit would make it difficult to persuade voters to lift it.

A carefully crafted campaign that made it clear that the limit would be waived only for the flood control project might win some converts, Rogers said, but even so, the measure would suffer just by appearing on the same ballot as one or more other tax proposals. “It’s so simple just to say ‘No, no, no, no, no,’ ” he said.

Harvey Englander, a Newport Beach-based political analyst, agreed, saying it is unlikely that Orange County voters can be easily persuaded to waive the Gann limit, even for a vital project.

To succeed, Englander said, a campaign would need to focus on the fact that waiving the limit would not cause a tax increase. “I would just tell people: ‘Look, we’ve got this money, and we just need your permission to spend it,’ ” he said. “I’d avoid talking about the Gann limit altogether.”

The U.S. Army Corps of Engineers has said the Santa Ana River presents the worst flood threat in the West. A worst-case scenario estimates that flooding from the river could kill 3,000 people and cause $18 billion in property damage.

With that kind of risk, officials say they have no intention of scuttling the project, no matter what the voters decide on the spending limit. If the waiver is denied, officials would probably have to assess a special levy on the 900,000 or so residents most likely to be affected by a flood.

Such a levy could easily add up to more than $70 a year per central Orange County resident, officials said, and the payments could stretch out for 20 years.

What’s more, the task of levying those fees would go to the supervisors, and that could prove even more politically unpopular than a proposal to waive the Gann limit.

“We just have to hope that the public is prepared enough for this project,” Sacco said. “We have to do something.”