O.C.’s Measure M Could Fall Along With S.D. County Tax : Revenue: There are similarities and differences between the two sales-tax increases, but neither was approved with a two-thirds majority.

Orange County’s ambitious transportation blueprint, approved by voters in 1990, was put in jeopardy Thursday by a potentially far-reaching California Supreme Court ruling.

The court’s decision does not directly affect Orange County because the case involved a San Diego sales-tax increase for courts and jails. But Orange County has a half-cent sales tax hike of its own to pay for transportation improvements, and some local leaders are worried that it could be vulnerable in light of the ruling.

There are important differences between the two taxes, officials said, but there are similarities as well.

Most importantly, like San Diego’s sales-tax increase, Orange County’s won by only a simple majority at the polls. The state Supreme Court ruled Thursday that “special taxes” require a two-thirds margin if they are to be held constitutional under the rules set out by Proposition 13, the landmark 1978 tax-cutting initiative.

“My first reaction is: ‘Oh my goodness, that’s bad news!” Supervisor Harriett M. Wieder exclaimed. “If the state high court rules that a two-thirds vote is necessary, then we could be in trouble.”

Measure M opponents, meanwhile, were jubilant.

“This is a major victory,” said San Juan Capistrano rancher Tom Rogers, a plaintiff in a lawsuit challenging Measure M. “This is best news I’ve heard in a long time.”

Measure M is expected to raise $3.2 billion over 20 years for local and regional highway and transit projects. At stake now for Orange County commuters: $550 million earmarked for the Santa Ana Freeway-widening project, $340 million for an advanced, high-tech transit system, and millions of dollars in local street and freeway improvements.

Those projects could be delayed or scrapped if Measure M falls.

However, some Measure M projects are protected, including the installation of car-pool lanes on the Orange Freeway and the purchase of the old Pacific Electric “Red Car” line. These projects were financed with bond proceeds backed by transit reserves, so they will go ahead as scheduled, no matter what happens to Measure M.

More than $50 million in Measure M proceeds have been collected, but the money has not been spent because of the court challenge that was mounted in January. The lawsuit alleges that a two-thirds majority was needed for passage. Measure M received 54% of the vote in the November, 1990, election. The case is now pending before the 4th District Court of Appeal in Santa Ana.

The bottom line for Orange County, officials said, is whether Measure M can survive several tests spelled out in Thursday’s Supreme Court ruling. Lawyers for the tax opponents say the measure will fail, but local officials are cautiously optimistic that it will not, mainly because they believe the facts surrounding Measure M are significantly different than those of San Diego’s sales-tax hike.

For one thing, transportation officials here said, San Diego County created a “shell” agency to raise taxes for services that would normally be the responsibility of the Board of Supervisors. The court ruled that the local government created that agency intentionally to circumvent Proposition 13.

By contrast, the Orange County Transportation Commission--a pre-Proposition 13 agency not created by the state Legislature or the Board of Supervisors--was responsible for calling the Measure M election.

“Under the circumstances, I’m optimistic,” said Clayton H. Parker, attorney for the Orange County Transportation Authority. “Obviously, we’re going to have to distinguish the Orange County tax from the San Diego one, but the (Supreme Court’s) decision today leaves grounds for doing that distinguishing.”

One of the tests suggested by the high court involves whether the agency collecting the new tax is performing functions that would normally be handled by a county Board of Supervisors or a city government.

“Freeways and transit have never been a county responsibility,” Parker said. “And most city money spent on roads is from a portion of the state gasoline tax, motor vehicle registration fees and court fees.”

But Mark Rosen, attorney for the plaintiffs in the Orange County case, said the Measure M election was specifically intended to give Orange County a way to get around Proposition 13’s two-thirds majority requirement.

But on one point, most officials agreed: If Measure M were struck down, there is virtually no chance that a similar initiative could go before voters again and pass by a two-thirds majority.

“It’s hard enough to get a simple majority,” said Supervisor Don R. Roth. “To get two-thirds would be impossible.”