Gov. Pete Wilson on Thursday chastised Orange County for not having a bankruptcy recovery plan and warned that future legislative assistance from the state depends on the county’s ability to develop a comprehensive solution within the next three weeks.
Although the governor formally vetoed a bill that would have given Orange County access to $1 billion in transportation funds to solve its fiscal crisis, he stated a willingness to allow such a diversion if the county proves it can get a grip on the problem.
“Orange County has not yet demonstrated the ability to negotiate a resolution to its fiscal problems,” Wilson stated in a letter explaining his veto. “It is imperative that Orange County do so before the Legislature reconvenes on Aug. 21, 1995.”
The governor’s terse comments put additional pressure on county officials who are scrambling to cobble together a recovery plan to extricate the county from bankruptcy as quickly as possible.
“I think the governor and Legislature are running out of patience,” said Supervisor William G. Steiner, adding that he thinks a state trustee could be in the offing. “We have a last-ditch opportunity for a local solution. This veto should be a big wake up call.”
Supervisor Marian Bergeson agreed that a trusteeship would occur if the county fails to develop a plan before the end of the month.
“I’m confident, however, we will have a comprehensive plan by the deadline,” she said.
Ever since the county declared bankruptcy Dec. 6, the governor has pushed county officials to solve their own problem. Wilson has been reluctant to appoint a trustee, but may be unable to avoid it any longer if the county does not develop a solid plan by the time legislators return from their summer hiatus Aug. 21.
Because a trustee would likely be empowered to single-handedly divert property and sales tax revenue away from special districts, cities and the county’s transportation agency into the county’s general fund as a means to solve the bankruptcy, there is enormous pressure on all of Orange County’s government bodies to find a home-grown solution, Steiner said.
In his letter to the state Senate explaining the veto, Wilson said he wants a recovery plan to involve more than just transit tax revenue.
“I will support a responsible recovery plan that permits Orange County to utilize [transit] funding, along with other pre-existing available revenue sources, to implement that solution,” Wilson said.
Recognizing the peril to their revenue streams, some governmental agencies have asked help in drawing a recovery plan from a group of influential businessmen who successfully brokered a settlement early this year between the county and agencies that lost money in the county’s investment pool.
Members of the Business Council, including Gary Hunt, vice president of the Irvine Co., and the group’s chairman, Wayne Wedin, met with some county supervisors Thursday to discuss a possible solution.
According to sources, the council would like to negotiate a recovery plan that would allow the county to tap into transportation funds but would also be agreeable to transportation officials, who have been vigorously fighting the attempted raid on their coffers.
“I think this recognizes the Business Council’s leadership ability and willingness to cut through the political fray, but I hope they won’t go down the path again to new taxes,” Steiner said, referring to the group’s support of the unsuccessful half-cent sales tax initiative.
There is talk among some county officials that the recovery solution would divert only one-eighth cent of sales tax revenue that would normally go to the county’s transportation agency, instead of a quarter-cent as proposed in the Senate bill Wilson vetoed.
Members of the Business Council could not be reached for comment Thursday.
Wilson’s veto, at least for now, thwarts the county legislative delegation’s attempt to divert about $70 million transportation funds yearly for the next 15 years. The veto also effectively killed a bid by cash-strapped Los Angeles County officials to tap into $75 million in their county’s transportation tax revenue for the next five years.
Officials from the Orange County Transportation Agency said they were pleased with the veto but still concerned about a possible diversion of funds. They have claimed that the previous bill would have caused them to cut bus services by 75% or more.
Because of the veto, it is uncertain whether the legislative delegations from Orange and Los Angeles counties, which normally are at odds with each other, will be able to reunite to draft another bill that both counties and the governor can support.
Some of Orange County’s representatives in Sacramento were optimistic that a new bill to divert transportation money can be crafted and passed.
Assemblyman Curt Pringle (R-Garden Grove), the county’s chief proponent of the transit fund diversion, has said he intends to introduce a new version of the vetoed bill when the Legislature reconvenes.
He said that bill will include a provision for a state trustee to administer the funds if the county doesn’t have a recovery plan in place.
* FINALLY SIGNED: Wilson signs the budget, freeing time for campaigning. A3
* MORE SQUABBLING: O.C. holds on to disputed property tax money. A30