Orange County voters must decide June 27 whether they are willing to pay another half-cent on each dollar rung up on local cash registers, in order to escape the largest municipal bankruptcy in U. S. history.
In deciding the fate of a ballot initiative dubbed Measure R, which would boost the current sales tax from 7.75% to 8.25% to raise about $130 million annually for the next 10 years, voters will effectively choose whether their county will repay its debts in full, and as quickly as possible.
Beyond resolving the issue of whether to pay or not to pay more taxes, the vote will also shape the answers to other questions: When to pay? How to pay? Whom to pay?
Finally, voters will send a message about the size and mission of Orange County government, which will be seriously affected one way or another, with inevitable consequences for the quality of life.
It is, perhaps, the most important ballot that county voters have ever been called upon to cast, a watershed event in the ongoing saga of the bankruptcy, which itself stakes a claim as the most important occurrence in the county's evolution.
The county's elected leaders, a team of high-priced experts and a star-studded corps of volunteer executives have spent six months sorting through the mess left by former Treasurer-Tax Collector Robert L. Citron's doomed investment strategy, which resulted in a staggering $1.7-billion loss last year for the county and some 200 cities, schools and other agencies.
To recover from the bankruptcy and repay all the losses, they fashioned a complex plan relying on special legislation from Sacramento, compromise settlements with thousands of creditors, and intricate new financing packages being taken to a wary Wall Street.
Ultimately, though, they cannot control a key element of their own plan. The fate of its linchpin, Measure R, depends on the will of the people.
A record number of absentee ballot requests suggests that Measure R may lure more voters than any special election in county history. Yet a recent Times Orange County Poll shows a hefty chunk of voters, some 15%, are still unsure which side they are on.
For many of these fence-sitters, the rhetoric of the hard-fought campaign only muddled the issues.
The Yes-on-R movement, led by the county's top administrators, insists that the question is a practical, financial one. They say Measure R will "cap the costs" of the crisis and end the uncertainty that has plagued the county since the startling investment losses were announced in December. It is, they argue, a business solution to a business dilemma.
The pro-R people also talk about character and credibility, saying the county must show a willingness to pay for its mistakes. Voting Yes, they say, is a mark of civic responsibility.
The No-on-R campaign begins from a philosophical perspective.
We are taxed too much, they say; any more would cripple the economy. Within the crisis, the anti-taxers see a long-awaited opportunity to reform government. They worry that if we rush to plug the county's financial hole with Measure R--the quickest, most straightforward and most far-reaching solution--the incentive to make county government more efficient will disappear.
Outraged that nobody stopped Citron from gambling their money away, they are wary of pouring good money after bad without a major overhaul of county government.
And they too talk practicalities: There are other ways to raise the dough. Let the investors--local agencies that joined the county's investment pool and people who bought the county's bonds--each take a hit and move on. Share the pain by shifting current tax revenue until the debts are repaid.
"People have to make a judgment: if they want to live with the uncertainty of what will happen if it doesn't pass. Or, pass the half-cent sales tax, suffer with it and move on, put it behind us," said Prof. Anil Puri, chair of the economics department at Cal State Fullerton.
"It may be only $50 or $60 [per person, per year], but the question is: How else are you going to use it? Are you willing to give it up? I asked one of my students about it. He said, 'That's a pair of sneakers for me--but that's important to me.' In a way, that sums it up."
Today, The Times offers an analysis of Measure R, with a point-by-point review of both sides' arguments.
No on Measure R
* Money would go into county's general fund, controlled by the same people who oversaw the bankruptcy.
To designate the money for a specific purpose requires approval of two-thirds of the voters; Measure R requires only a majority and sends the projected revenue to the general fund.
According to the ordinance, the money "shall be used for general purposes of the county, including, but not limited to, preservation of essential county services and payments to schools, cities and other creditors of obligations and debts of the county related to the bankruptcy."