Sometimes being in the room helps get the story straight. Orange County lost its case to retain $73 million in property tax revenue, in a legal decision stemming from the 2011 state budget deal. The decision will be appealed, as County Supervisors struggle to fill the gap which will decrease employment and services dramatically, if we lose the appeal. Reports as to how and why we got into the mess are becoming skewed.
In 2011 in order to punish a Democrat Senator for not casting a tax vote, the Governor and/or his Finance staff decided to find a way to unwrap $40+ million in additional funding the Senator was granted in 2009. Voilà! They discovered that when Orange County was refinancing debt related to the 1995 bankruptcy workout (to repay the debt faster and cheaper) there was an uncrossed “T.” To explain, the County had, at the request of the bondholders, swapped a portion of its property tax revenues for vehicle license fees it was sending to the state to provide “collateral” so to speak for the bond repayment. In the 2007 refinance the County neglected or decided not to get the Legislature to reauthorize the swap. So in 2011, Brown merely took $49 million extra vehicle license fees from Orange County without returning the property taxes. Senator slapped and County punished.
I was working on a bill with a former OC Democrat Assemblyman to reinstate the funding last year. I begged for Republican votes while he gathered Democrat votes. Getting votes to fund the “perceived wealthy” OC is never easy, especially when there is no quid pro quo for out of county members. But our mission was accomplished with enough fair-minded members. Unfortunately the bill was not allowed to proceed with a vote on the Assembly floor until after 11:00 p.m. the last day of session, failing to reach the Senate in time for a vote before midnight. The Democrat Majority Party makes the rules, runs the floor and our bill had no chance.
The spin is the Republican delegation’s sour relationship with the Democrats caused the snafu, and that the county is crying wolf over looming budget woes. But that is clearly not the case. We like others are facing decreasing funding for public safety with more prisoners to house thanks to “realignment,” plus a potential whack to education funding based on the “realignment” formula being proposed this year. Prepare to hear the wailing and gnashing of teeth soon to support our schools and public safety by increasing local taxes.
In short, while acknowledging the state’s finances are on the mend, unemployment is prevalent while taxes and state spending are increasing. The Administration is also balancing the state budget on the backs of our cities and counties through “local control.” Local control is now synonymous for “raise local taxes” if you want services the state used to provide. In Orange County we are beginning “local control” at a terrible disadvantage and increasing state mandates.
Orange County ranks 58th out of 58 in property tax retention. We are and have been a donor county for years, while the state continues to backfill LA. We now have two Democrat Assembly Members and one Senator. Unfortunately, as they are members of the Majority in the Legislature, and run the house, the pressure must fall to them to help get our property tax revenues and education funding fairly aligned. San Diego Legislators work in a bipartisan manner for San Diego issues. Hopefully our OC delegation will do the same and not allow our county to be the ATM for the state.