ORANGE COUNTY IN BANKRUPTCY : O.C. Supervisor Silva Joins Measure R Foes : Politics: First board member to openly oppose tax hike attends strategy session. Popejoy, legislators react angrily.

Five weeks after voting with his colleagues to place a half-cent sales tax measure on the June 27 ballot, Orange County Supervisor Jim Silva on Thursday became the first board member to openly oppose Measure R.

Silva, who was elected in November on a campaign of no tax or fee increases, made clear his opposition to the proposed tax hike Wednesday during a breakfast strategy meeting of Measure R opponents in Newport Beach.

“Philosophically, I felt I had to vote to put Measure R on the ballot, but I am opposed to tax and fee increases,” he said Thursday, explaining his appearance at the strategy meeting. “While I am not coming out real hard against Measure R, philosophically, I don’t support new tax and fee increases.”

When he cast his vote to place Measure R on the ballot following a marathon public hearing March 28, Silva said he was torn. He stated his opposition to taxes but acknowledged that state Treasurer Matt Fong and others had warned him that the county could not afford to default on the more than $1 billion in bonds coming due this summer.

“I do think that the people of Orange County are already taxed enough,” he said at the time. “But with the financial crisis, I think it is an exception to the rule. I hate it. I think it’s disgusting. I think some way we’re going to be able to work it out without having to go for a long period of time on this half-cent sales tax.”

Silva admitted Thursday that he is “still doing a lot of soul-searching” over the tax issue and is trying to come up with alternatives.

“Maybe if there were a Plan B out there,” he said, “then people could look at the alternatives and make a better choice.”

Silva said he would “probably” vote against the measure at the polls June 27.

As possible alternatives to the county-crafted bankruptcy recovery plan that includes the half-cent tax hike, Silva said the county should settle its billion-dollar lawsuit against brokerage house Merrill Lynch & Co. and also look into possible ways of further cutting back on employees.

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Supervisor Marian Bergeson already is speaking out in favor of the tax hike and has announced she will vote for the measure, which would raise some $130 million annually and is a key element of the recovery plan crafted by County Chief Executive Officer William J. Popejoy.

“You’re kidding. Geez,” was Popejoy’s immediate reaction, when told of Silva’s position.

“It is time for people to show leadership, to work toward a recovery and a plan to get the bankruptcy behind us,” Popejoy said. “It is causing damage to our economy and home prices. . . . We have a plan--that includes Measure R--that will get the bankruptcy off the back of the citizens, and it seems to me the leadership should be interested in the solution. Either they are part of the problem or they are part of the solution.”

Since the supervisors voted unanimously to place the half-cent sales tax increase on the ballot, Board Chairman Gaddi H. Vasquez and Supervisor Roger R. Stanton have avoided stating their views on the tax proposal. They did not return calls for comment Thursday.

Supervisor William G. Steiner has said he would announce in favor of the measure if there is a strong call from local cities and schools for it, though he has declined to say how he personally will vote.

Both Stanton and Silva said at the time that they had struggled with their decision to put Measure R on the ballot. The approval of four of the five supervisors was needed to place the sales tax before the voters, and both Stanton’s and Silva’s votes were in doubt up until the final moment.

Silva spoke out against the sales tax increase Wednesday at a strategy and organizational meeting called by the Republican Central Committee, which unanimously voted its opposition to Measure R on April 17. The session, which was held at the office of developer Buck Johns, drew some 40 prominent opponents of the tax hike.

“He (Silva) talked and led the Pledge of Allegiance and also gave some very encouraging comments to the body,” said Orange County Republican Party Chairman Thomas A. Fuentes, noting that Silva “was commending the organizing effort, commending the time and energy people were putting in and committing his support.”

Johns, who hosted the gathering, said it was organized by the county party Central Committee, which sent out the invitations. The purpose was to bring together the core group of Measure R opponents under the banner of the Citizens Against the Tax Increase, which was formed last week by a group of Orange County business people.

“This was our first strategy session,” said Johns, adding that the purpose was to make some campaign decisions and also assign tasks.

Fuentes, who called the session to order at 8 a.m., described it as remarkable, with “no one looking for publicity. Here you had a very broad-based leadership group and activist people all coming together. We were looking at who would be best at organizational, speaking, fund-raising, event planning, voter contact--all those things that go into a movement.”

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In addition to the business leaders who are heading the Citizens Against the Tax Increase, there were representatives of the Committees of Correspondence, the Libertarian Party, Rep. Dana Rohrabacher (R-Huntington Beach) and all but one of Orange County’s Sacramento delegation.

Dale Dykema, a co-chair of the Citizens Against the Tax Increase and a Lincoln Club vice president, said he was surprised to see Silva at the strategy session.

“I didn’t expect to see him there. I expected to see folks who are actively involved in opposing the tax,” said Dykema, who runs T.D. Service Financial Corp., which provide services to lenders and financial institutions. “As to what his rationale is, the only thing he said . . . is that when he ran (for supervisor) he ran against raising taxes, and he was just sticking with his position.

“I have no idea why he felt it necessary to come out that strongly with a position.”

State lawmakers from outside Orange County reacted harshly to news that Silva is opposing the ballot measure that he had helped put on the ballot.

“When is he resigning?” asked Sen. Lucy Killea (I-San Diego), chairwoman of a Senate special committee on the bankruptcy. “If he can’t support the county plan he voted for, how can he keep office? There’s some incongruity there.”

“He looks foolish and irresponsible,” added Sen. Quentin Kopp (I-San Francisco).

“I think it should make the entire Legislature, without regard to party, view their package more skeptically,” said Assemblyman Richard Katz (D-Sylmar). “Unfortunately, it does not surprise me. Too many elected officials in Orange County are more concerned about protecting their political backsides instead of standing up and doing what’s right.”

Silva reacted brusquely to the comments, saying, “I think they ought to jump in a lake. This is a democracy and people have a right to vote.”

If approved, revenue eventually generated by the tax would be earmarked for the county general fund, freeing other money now to back additional borrowings this summer. The increase would raise the county sales tax to 8.25% for 10 years. At that rate, it would cost each of Orange County’s 2.6 million residents roughly $50 a year, though proponents say some 20% would be paid by tourists and other visitors.

Popejoy said that he would support a better bankruptcy bailout plan, if one is ever presented.

“If a better plan comes along, we will embrace it,” he said. “As soon as a tax passes, the most important next step will be to come up with a plan through sale of (John Wayne Airport), the waste disposal operations. These are things we cannot do by this summer.”

Popejoy said the county would benefit from litigation proceeds, if it can resolve its suit against Merrill Lynch.

“Given more time we can do these other chores and get the (sales) tax off,” he said.

Times staff writer Eric Bailey contributed to this report.

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What Silva Said

The following is an excerpt of Supervisor Jim Silva’s remarks after a marathon March 28 board session just before he and his colleagues voted unanimously to put Measure R on the June ballot:

“You know, as a councilman in Huntington Beach, I think probably the roughest vote I ever had was when two of my friends were fighting over a block wall fence that separated their yards, and both worked hard on my campaign and I had to decide how far the block wall would extend. I hated that, but that is nothing compared to the hand that I’ve been dealt on this issue.

“I do think that the people in Orange County are already taxed enough. But with the financial crisis, I think it is an exception to the rule. I hate it. I think it is disgusting. I think some way we’re going to be able to work it out without having to go for a long period of time on this half-cent sales tax.

“I do think that the power is with the people. I think that they have the right to vote on it. This is not Jim Silva’s problem or his fault. It’s 2 1/2 million people in Orange County that have to deal with it. It’s the quality of life, it’s the investment in real estate, and I don’t think Jim Silva has the right to determine how 2 1/2 million people should live or pay their taxes, so I vote for the motion.”

* MAJOR LOSSES FOR MINORS

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