O.C. Tax Hike Argued Before Civic Leaders

Both sides promise to muster large cadres of foot soldiers for the June 27 election. Both sides say their coalition will span the political spectrum.

But right now, in the early stages of the Measure R sales-tax campaign that has become the centerpiece of the Orange County bankruptcy debacle, politics consists of each side facing off before the county’s opinion leaders and its rainmakers.

Last week it was the Orange County Auto Dealers Assn., among others. Next week it will be the Health Care Council of Orange County.

The auto dealers met quietly Thursday morning at the Red Lion Hotel in Costa Mesa, and into the ring stepped Yes on R’s best: County Chief Executive Officer William J. Popejoy, Sheriff Brad Gates, Irvine Co. Executive Vice President Gary Hunt and Dist. Atty. Michael R. Capizzi.

Weighing in for the No side were Garden Grove Councilman Mark Leyes and attorney and TV commentator Hugh Hewitt.

When it was over, the auto dealers had opposed the half-cent sales tax boost and a number of dealers had pledged five-figure contributions to defeat the tax.

An exhilarated Hewitt, who lives in Irvine, called it a defining moment.

“When retail breaks from the business pack it is marker,” said Hewitt, declaring it “strike one” for the pro-tax side.

Gates differed.

“I would call it a foul ball,” he said. “That is one retail group in the county, albeit a very respected one. But we have the (Orange County) Business Council’s total support and there are (2,000 companies) in that group.”

So it goes, as each side tries to broaden its base and fatten its wallet for a knock-down ballot contest that will last about two months.

What’s going on is clear: the sides are crafting unusual alliances: anti-tax activists aligned with some Democrats. Business folks in bed with pro-tax public employee unions. Members of the Grand Old Party divided, with conservatives calling moderates “counterfeit Republicans.”

As the campaign begins over the effort to pump up the county treasury, the Yes-on-Measure-R forces face an uphill fight, according to a recent Times Orange County Poll, which had the No side ahead by 57% to 36%.

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Eyeing the truncated time-frame for winning a majority to the side of the sales tax, the pro-Measure-R team will spend $2 million to $3 million pressing a campaign that promises to be big on direct mail and voter education.

They will be telling voters that paying for the bankruptcy and the $1.7-billion loss to the county investment pool is inevitable. The cleanest way to end the fiscal drain will be through this sales tax hike, which will raise $130 million annually, said electoral guru Stu Mollrich, whose firm, Butcher, Forde & Mollrich, is coordinating the Yes-on-R campaign.

The alternative to this quick cauterizing of the county’s fiscal wounds, the Yes campaign will emphasize, will cost even more. It would come in the form of lowered housing values, loss of new business, huge legal bills and a drawn-out fiscal dilemma that would be disastrous for schools, services and the Orange County way of life.

“This is largely an effort to educate people about a somewhat complex issue,” said Todd Nicholson of the Orange County Business Council. “We are challenged to sit down with our neighbors and explain to them the lack of options confronting the county. . . . “

“We have to get the message out . . . about what the alternatives and what the impacts on the quality of life and property are. I think we have a good chance. I expect an extremely close vote.”

The Yes side is a strange alliance. It is trying to pull together much of big business and labor as well as parent-education groups, and has endorsements from Common Cause, the League of Women Voters, the Orange County Business Council, the California Teachers Assn., the Orange County Taxpayers Assn. and the AFL-CIO, among others.

There is a central command under Sheriff Gates and the team at Butcher, Forde & Mollrich. Some in the coalition, however, are wondering how they got into bed with former enemies.

“I am not pulling the covers up over my head,” said Orange County Central Labor Council Secretary-Treasurer Bill Fogarty as he discussed the coalition, which he described as even more broad-based than the 1990 group that pushed through Measure M, a half-cent sales tax to fund transportation projects. “We have never had relationships with the business council, but we have a common relationship to see the county runs better and we don’t want to see employers chased away from here.”

Few doubt the fund-raising clout of the Yes team, which already has $130,000 in cash, according to Gates, and pledges for almost $800,000 more. Their challenge will be to match the promised public education drive of the No side with their own forums, speaking groups, absentee ballot and get-out-the-vote campaign.

The Yes leadership said it is organizing all that and already is running a training program for speakers, who will include superintendents of schools, business executives and others. Door-to-door troops will come from the teachers, parents groups and perhaps labor.

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The No side says it will play to its own strengths, harnessing foot power and “truth-telling” squads from activist groups across the county, as it presses home a message that criticizes county government on grounds of incompetence and waste and demonizes the supervisors and big-money backers of Measure R.

“These are the same rats in a different race,” said South County anti-tax activist and former Republican County Chairman Thomas Rogers, who three times opposed the half-cent county transportation sales tax, which finally won in 1990.

The tax’s opponents will have a direct mail campaign too, but it will be paid from a smaller campaign war chest--hopefully $400,000 to $500,000, said Bruce Whitaker of No on R.

The No side will be telling voters that the county has failed to do all it can to trim government, find hidden sources of revenue, privatize and sell off assets, and devise new solutions in a political climate that stresses the idea of reinventing government.

In the view of many anti-Measure R leaders, the time to strike against the status quo is now.

“We want a smaller and more efficient county,” said tax attorney Eric Norby, a member of the No on R steering committee. “This is a visionary time and we are seeking serious solutions for the obsolescence of county government. A lot of what the county does and what the water districts do could be done by somebody else. We would all end up with better government.”

Not everyone in or leaning toward the No camp feels the same, however. Its leaders are trying to erect a tent that will shelter the traditional anti-tax crowd, seniors, angry school and city officials who were burned in the county investment pool, anti-government types, Libertarians, remnants of Ross Perot’s organization and some Democrats.

It’s a stretch.

Jim Toledano, chairman of the county Democratic Party, is personally opposed to the tax. The Democratic Central Committee will vote on the issue at its meeting tonight, and he expects a split decision.

Toledano is no fan of tearing down government, but he sees the countywide sales tax hike as regressive and unfair, and the solution crafted by county Republican leaders as lacking vision. The No side hopes views like this will provide political shelter for traditional Democrats, who number some 400,000 of the county’s 1.2 million voters.

“I would like to allow schools, cities and special districts to impose an income-tax surcharge,” Toledano said, adding that this could be authorized in Sacramento. “That is a much more equitable way to raise the money. It is also better because it would allow each district to decide independently” on what services it wants and what it is willing to pay for.

There is an organizational challenge for the No side. Can it coalesce?

The No forces are an amalgam of many anti-tax and activist groups that grew up over the years in response to local problems in cities throughout the county. These groups--all separate committees--joined together since the bankruptcy was declared on Dec. 6, under an umbrella group called the Committees of Correspondence.

It is the Committees of Correspondence and a group formed from that--the No on R Committee--that will lead the opposition.

“Part of our strategy is to stay loose and disorganized,” said Whitaker, who serves on the steering committees for No on R and the Committees of Correspondence. “We see it as an advantage to be decentralized. It is very much guerrilla warfare rather than everything being funneled through one outlet.”

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If passed, the tax would raise some $130 million annually and phase out in 10 years as it helps finance the county bailout. At that rate, the tax could cost Orange County’s 2.6 million residents about $50 a year each, though proponents say some 20% of the tax would be paid by tourists and other visitors.

Despite their reputation as fiscal misers, county residents have supported tax hikes in the past. A county transportation levy took three turns at the ballot--beginning in 1984--before it passed as Measure M in 1990 with 54.8% of the vote. More recently, Proposition 172--the California half-cent sales tax for local public safety purposes--passed in 1993 with 52% in the county voting yes; statewide it garnered 58%.

The No forces are taking cheer from their lead in the Orange County Times Poll; taken in early April, it showed them 21 percentage points ahead.

Hewitt declared the margin insurmountable for the pro-tax side. “When you are 20 points behind with two months to go,” if you are going to win, “you can have no noise against you and you also need a lot of money for you,” he said. “That’s what made Measure M pass.”

“There is already a lot of noise against this,” he said, ranging from last week’s unanimous Republican Party Central Committee vote against Measure R to “the voices of the non-elite opinion makers. . . . I don’t think a lot of people are going to spend money on what is a dying proposition.”

But Mollrich pooh-poohed the recent Times poll and such nay-saying.

“Winning this is not impossible,” he said, “but it will certainly be difficult. Frankly, I don’t believe the poll.” The Yes forces have a poll of their own. Taken around April 13, it reportedly shows the electorate split at 45%-45%, with 10% undecided.

“I have got to think a well-managed campaign can move 6% into the pro side,” said Reed Royalty, president of the pro-tax Orange County Taxpayers Assn. “Voters have to get over the anger. . . . We are trying to look beyond that and find a solution. There is time to deal with blame down the line.”

Both sides agree that the contest will be close. And one thing is certain: The Yes forces won’t be calling on the supervisors to help in the campaign.

Nevertheless, Supervisor Marian Bergeson is speaking for the measure at every opportunity and says she will vote for it. Supervisor William G. Steiner said he would announce in favor of the tax if there is a strong call from local cities and schools for it. He declined to discuss his vote. None of the other three supervisors answered repeated requests to comment on the ballot measure.

Former Irvine Mayor Larry Agran--whose combined city, school district and water district stand to lose the most cash in the bankruptcy--is torn over Measure R, though he supports a proposed parcel tax to help the Irvine Unified School District.

Support for the sales tax has its price, though.

“To stand any chance of passage, Measure R requires that Supervisors (Roger R.) Stanton, (Gaddi H.) Vasquez and perhaps Steiner declare they will not seek reelection,” Agran said.

“The county is in terrible financial distress, but the case has not been made that the people in charge have their priorities straight, that they are going to take care of the weakest and the most vulnerable first,” he said. “And the case hasn’t been made that these guys ought to be entrusted with anything.”

Times staff writer Rene Lynch contributed to this report.