Economically Speaking, County In for Fair Weather

Yes, the weather’s fine and the beaches are all open again, but there’s an extra ingredient in the Orange County mix this summer that bodes especially well: the economy.

Chapman University updated its economic forecast several weeks ago to include new information showing that the financial picture for the county is better than expected. In Santa Ana, the Board of Supervisors adopted a budget for the coming year with the announcement that the outlook is better than at any time since the December 1994 bankruptcy.

Orange County’s libraries also chimed in, saying that more money is available and will be used to keep the buildings open more days. That would be especially welcome, given the problems of the libraries in recent years when the state shortchanged them on funds. On the job front, UC Irvine reported that 235 companies recruited on campus this year, up from 211 last year. The school’s engineering graduates are in particular demand.

Much of the improvement reflects the cyclical nature of the economy. The early years of this decade were tough on the county, with defense jobs disappearing and housing prices plummeting.

As conditions improve, the county will have to guard against excessive swings in the pendulum. Even with lower prices for housing, the county still needs more apartments, condominiums and single-family dwellings that are affordable by those on the lower rungs of the ladder. Affordable housing long has been a problem for the county, one that will become worse if housing prices ratchet up again. Companies looking to relocate here want their workers to live as close to the shop as possible. When employees have to commute long distances from neighboring counties, companies think twice about calling Orange County home.

Still, the county’s attractive features, including its strong position in technology and international trade, are leading to increases in jobs.

Chapman President James Doti said the school is now forecasting the creation of 36,000 new jobs in the county this year, an increase in the number projected by the university only last December. Residential construction is especially strong, and overall construction industry employment is expected to jump more than 8% this year, according to the forecast.

Doti also noted a “structural change” in the county in the last five years. Cuts in aerospace and moves by manufacturers to lower-cost regions have been more than offset by growth in jobs in the service sector, especially computer software development. That ability to adapt to changing conditions is a tribute to the companies and employees in the county.

On the day of the Chapman forecast, county supervisors gave preliminary approval to a $3.66-billion budget for the new fiscal year. The final budget will be considered in September. One worthwhile inclusion in the spending blueprint is more funds for the Probation Department, which suffered more after the bankruptcy than the other components in the county’s public safety network, the Sheriff’s Department and district attorney’s office. Proper attention also has been given to reducing the debt incurred by the county as part of the recovery from bankruptcy, with an additional $24 million set aside for early repayment of bonds.

The county’s acceptance of $30 million from Merrill Lynch in return for dropping a criminal investigation into its role in the bankruptcy will also help the economic picture, no matter how the pot is divided. But the need for the money is great, too, from new jails to more shelter for abused children to a new South County courthouse. Still, now is the time to take advantage of a bright financial picture, since as the county has learned so painfully, it can fade abruptly.