Think Tank Reverses Its Stance, Backs Short-Term O.C. Tax Hike

Now even the libertarians say a tax hike is inevitable.

The Reason Foundation, a think tank that last month insisted Orange County could slash, sell and privatize its way out of financial disaster, announced Tuesday that it has switched positions and supports a short-term tax increase as a crucial part of a wide-ranging recovery plan.

“You don’t want to stand on principle to the point where you cut your own throat,” said Bryan Snyder, senior vice president of the Los Angeles-based foundation. “We haven’t changed our minds about all the bad effects of a tax increase,” Snyder said, “(but) that may be the only tool you’ve got.”

The foundation joined a host of other observers of the ongoing crisis--including business leaders, citizen activists, Wall Street leaders, state politicians and officials of local agencies that participated in the county’s failed investment pool--who have said new taxes and fees must be considered.

But the County Board of Supervisors has repeatedly insisted that tax increases are out of the question.

Snyder, who first revealed the organization’s change of heart on the KCRW-FM radio program “Which Way, L.A.?,” said the county’s pressing schedule of bond payments and other obligations over the next few months requires an immediate revenue stream.

While the foundation remains confident that government “rightsizing” and asset sales eventually could plug the $2-billion hole the county faces, those methods cannot raise cash quickly enough, Snyder said.

Last week, county Chief Executive Officer William J. Popejoy announced 1,040 layoffs of county workers, a list of county properties to be put up for sale and another list of county services that can be turned over to the private sector.

But those initiatives will not save or raise enough money to meet $1 billion in bond debt coming due this summer or to fully repay the nearly 200 cities, school districts and other agencies that placed money in the county pool, the foundation said.