O.C. IN BANKRUPTCY : In Victory, Measure R Foes Sense New Order : Election: Campaign leaders view defeat of the proposed O.C. sales tax hike as a blow to developers who supported it.

Carole Walters, a grass-roots activist who leads a taxpayer association in the city of Orange, is celebrating the defeat of Measure R in the spirit of David’s victory over Goliath--with Orange County’s development-driven business community cast as Goliath.

“We little people were just tired of paying for the big people’s demand for more profits,” said Walters, president of the Orange Taxpayers Assn., which has about 400 members. “Well, we’re fighting back. Local government is learning that it works for all the people, not just the big people.”

Walters said her involvement was driven by a belief that many of the county’s powerful business leaders are busily pulling strings to manipulate county government to their own benefit. That perception was strengthened, she said, when business leaders who generally take low-key approaches on controversial tax measures marshaled the troops for Measure R.

But what pro-Measure R forces, including the Orange County Business Council, got was a sound thrashing, according to one of the pro-Measure R force that gathered Tuesday night at Antonello’s Ristorante in Santa Ana.

“Everyone at Antonello’s sensed that the old order has changed,” the observer said. “And it’s hard for anyone to figure out what comes next.”

Despite the political uncertainties spawned by Tuesday’s vote, UC Irvine Prof. Mark P. Petracca is certain that the county’s powerful, development-driven business community isn’t going to simply fade away.

“It’s sort of like the Wizard of Oz,” Petracca said. Business leaders “never did like to have to come out from behind the curtain. And they were pretty effective [before the bankruptcy] from behind that screen.”

The unlikely cast of characters that moved out in front of the curtains included many of the county’s most powerful businesses, including the Irvine Co., Rockwell International Corp. and Walt Disney Co. They were joined by organized labor and the League of Women Voters in an epic showdown against what Fullerton activist Bruce Whittaker called “Joe Citizen.”

The David and Goliath comparison was driven in large part by the fact that the business-led group built a $1.4-million campaign war chest, while the anti-tax alliance made do with about $100,000.

UC Irvine Prof. Rob Kling suggested that Orange County’s evolving business community wasn’t well-equipped to deal with this type of pro-tax campaign.

The Irvine Co. and county homeowners “actually share a common interest in keeping property values up,” Kling said. “But that wasn’t the right company for this issue. They weren’t seen as credible.

“And, the business community in Orange County isn’t homogeneous. It’s hard to get an agreement of what’s of benefit to ‘us.’ ”

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Business leaders began to distance themselves from the overwhelming defeat Tuesday night.

“We said let the voters decide,” Irvine Co. Vice President Gary Hunt said just hours after the polls closed. “We have. So now we’re going to have look for alternative ways to solve the problem. It’s now going to be up to the elected officials to pull everybody together and decide what we’re going to do.”

Business leaders brushed aside suggestions that, along with trashing the tax, voters told developers to keep their hands off of government.

“I don’t at all see this as a vote against business,” said Orange County Business Council Chairman Wayne Wedin. “People simply said, ‘We think there’s a different way to do this.’ The voters said that restructuring of local government is critical, but that there are ways to do it without the taxing option.”

Business Council President Todd Nicholson described the vote as a byproduct of national voter dissatisfaction with big government--not a defeat of Orange County’s business leaders: “We’re really reading it as a demand for restructured government in Orange County.

Similarly, Pacific Scientific Chairman Edgar S. Brower, an anti-tax Republican businessman who doesn’t remember the last time he supported a new tax, said he appreciates the deep moral and political issues that are prompting voters nationwide to grow weary of “government as usual.”

“Generally, businessmen can speak emotionally with the best of them,” Brower said. “But we’re also pretty pragmatic people. We’ve had enough emotion in this county and we honestly saw this as the most acceptable way to get the county out of bankruptcy.”

Nicholson admitted that anti-tax forces successfully framed the tax vote as a David vs. Goliath affair.

“That’s all part of the campaign game,” Nicholson said. “They successfully characterized the business council as representing big business, when in fact more than half of our members employ less than 50 people.

“We understand that. It’s part of the political campaign. But I feel a real frustration with the fact that there was so much difficulty in clearly defining the consequences. This was such a complex issue.”

Brower wondered how Orange County--business leaders and anti-tax forces alike--will cope during the coming months, as the county struggles to put its financial house in order.

“Orange County is something of a paradox,” Brower said. “We speak very conservatively, we espouse conservative thought, but we all want the goodies that come from government services. And when those start to disappear, when the county’s interest rates go up, we’ll see what happens.”