Swallow Hard, Tax Yourself : Sometimes there is no easy or painless way out
The nation has been watching to see what the Orange County Board of Supervisors would do in the face of an incontrovertible fact: There is no timely way to close the huge fiscal gap caused by the county’s bankruptcy without new taxes. This week, the supervisors indicated that they may have the gumption to do the right thing.
People everywhere are looking for local government to make the tough calls, and on Tuesday the Orange County supervisors gave preliminary approval to a special tax election in June. The voters will decide whether a half-cent sales tax will be imposed for 10 years. The levy would bring Orange County’s rate even with Los Angeles’ at 8.25%.
Some supervisors waffled even as they tentatively agreed to let voters decide. However, Gaddi H. Vasquez, the board chairman, articulated an appropriate sense of realism when he said it just isn’t possible to take the easy way out.
The supervisors must give final approval next Tuesday, and predictably, the staunch anti-tax forces have been howling in earnest. Those on and off the board who would gamble with the county’s fiscal viability now have the full burden of proof upon them. Chief Executive Officer William J. Popejoy and others argued persuasively that layoffs, asset sales, privatization and litigation would not be enough to close the gap and meet the obligations to bondholders.
The alternative is remaining in bankruptcy with all its dire consequences. For a while there was hopeful talk about doing it without new taxes. No more. It is incumbent upon those straddling the fence or in opposition to come up with an alternative plan that relies on verifiable numbers and realistic timing rather than wishful thinking.
Getting Orange County’s leaders to think so realistically has not been easy. For example, supervisors recently called for Popejoy to remove some deep cuts in social services but they offered no clear blueprint on where he should find the savings. All of the supervisors will have to recognize that the choice comes down to working to sell voters on the sales tax or live with the awful fallout of bankruptcy and then try to explain it to their constituents and future generations.
Some recent polling on the bankruptcy suggests a high awareness among residents, but there is much education to be done between now and June about the depths of the fiscal gap and the consequences of inaction.
A part of Southern California’s fabled quality of life is at stake. The credibility of Orange County and the rest of the state in the financial markets also is on the line. The supervisors took an important first step. Now they must be prepared to follow through.
