Weird Timing in Sacramento : As Orange County approves tax vote, Senate panel hurls a takeover threat

For months, Sacramento officials have been lecturing Orange County on the need to get its house in order after declaring bankruptcy last December. Senate and Assembly members strongly, and rightly, demanded a concrete plan for the county to repay bondholders and the public agencies that invested in a pool that lost a staggering $1.7 billion on risky investments.

Just after midnight Wednesday, Orange County supervisors provided a key element of that recovery plan, voting to put a half-cent sales tax increase on the ballot in June. Incredibly, a state Senate panel hours later ladled out faint praise and then threatened to impose a fiscal takeover of the county in exchange for any loan.

The vote by the state Senate’s Local Government Committee was premature at best and political posturing at worst. The state Legislature is hardly a paragon of budget crafting. In recent years Sacramento has balanced the state budget partly by raiding county treasuries. Spending plans have been based on unrealistic revenue estimates.

There has been nearly unanimous agreement that it is up to Orange County to work its way out of its financial morass. The county has requested state assistance in changing laws so it could direct some locally raised revenue specifically to paying off its debts. It has also requested a state guarantee of loans as part of a complex recovery package. Legislators can debate the merits of those requests, but they should not insist on running the county’s affairs, with the supervisors as mere bystanders, in exchange for a loan even before they see the results of the tax-increase vote.

The supervisors, unanimously anti-tax when bankruptcy was declared, courageously voted to put the tax hike on the ballot despite recall threats made against them. They correctly concluded that laying off more than 1,000 county workers, selling assets and privatizing services would not be enough to cover the losses.

The Senate committee’s measure has far to go before it becomes law. The time may come when the state does have to step in and rescue Orange County, assuming some control as well. But that should remain only a worst-case scenario.