Orange County Treasurer-Tax Collector John M.W. Moorlach said Monday he will oppose a half-cent sales tax increase designed to help bail out the bankrupt county unless cities, school boards and agencies that would benefit from the tax agree to support it.
The government entities that had money in the county's failed investment pool have demanded to be fully repaid for their losses.
"If the participants in the pool want to be made whole by the county, and if that is agreed to by everyone, then those participants should be approving a sales tax increase," Moorlach, the county's newly appointed treasurer, said in an interview.
"So where I've had some difficulty is watching, listening, observing participants that are requesting to be made whole, but are opposed to a sales tax," said Moorlach, who replaced Robert L. Citron, the longtime treasurer-tax collector whose ambitious investment risks are blamed for the bankruptcy.
Although saying he would oppose the sales tax hike if participants in the investment pool don't back the measure, Moorlach stopped short of promising to endorse the tax increase if the agencies agree to favor the measure.
Moorlach stated that as a conservative, he is "doing a lot of soul searching" on the sales tax question, which goes before countywide voters in June and, if approved, would raise the tax to 8.25%.
The county's economic recovery plan entails eventually fully repaying creditors, a settlement Moorlach called "very generous."
Irvine City Manager Paul O. Brady Jr., who is a member of the Investment Pool Creditors committee, disagreed that agencies are somehow obligated to support the sales tax boost.
"I think the sales tax should stand on its own merit," Brady said.
Brady said the Irvine City Council hasn't decided yet to take any action on the tax proposal. "I think most cities in the county are doing likewise, taking a wait-and-see attitude," he said.
Both Moorlach and Brady said the county must look seriously at a package of measures, beside the sales tax increase, to raise money, including layoffs of county employees, asset sales, reorganization and restructuring of county government and privatization.
But they disagreed whether support for the sales tax, the settlement package and the other measures should be linked.
"Until and unless the county has demonstrated that it has done everything possible to make the reductions," Brady said, "then and only then should they be asking local government officials to endorse the sales tax."