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ORANGE COUNTY PERSPECTIVE

A Recipe to Keep Jobs Here

May 25, 2003

The UC Irvine annual survey of Orange County business executives turned up plenty of bad news. The worst is that a quarter of the 300 business leaders contacted during the weeks leading up to the Iraq war plan to move all or part of their operations out of Orange County.

What keep executives awake at night are skyrocketing workers' compensation premiums, traffic congestion and the high cost of housing. Three admittedly tough problems -- but barriers that, with visionary leadership, need not be insurmountable.

County residents can't do much on their own to lower workers' compensation premiums. But elected officials in Sacramento this month unveiled a multi-pronged rescue plan to cut medical and administrative costs that are fueling workers' comp premium hikes and eating into benefits promised to workers injured on the job. Local business executives should keep applying pressure in Sacramento to ensure that the badly needed reform package doesn't fall off the table as the budget crisis worsens.

That leaves traffic and housing, two problems that are being exacerbated by the county's continuous population growth -- and that force business owners to consider relocating. A June vote in Irvine could determine whether planning for the controversial CenterLine light-rail system is going to proceed. And debate has just started over a nascent proposal to extend the Orange Freeway along the Santa Ana River channel.

On the housing front, it's long past the time for the county to recognize that more affordable alternatives are needed. The median sales price of a home in April for the first time surpassed $400,000, ensuring that Orange County remains one of the state's most expensive markets. But as the county continues to shift from suburban oasis to an increasingly urban environment, elected officials can do more to promote policies that make more affordable housing a reality. The days of simply clearing another orange grove and erecting another single-family subdivision are rapidly drawing to a close as big, empty parcels are covered over with buildings.

Cities can improve the supply of more-affordable housing by using their considerable redevelopment power to turn older and blighted areas into new residential neighborhoods. It will mean weaning cash-strapped elected officials and city managers from their troublesome search for projects that generate sales tax revenue, but in the process eat up redevelopment funds that instead could be used to help finance more low-cost housing.

And again, local government can't do it alone. Sacramento must ensure that local governments get adequate funding so elected officials won't keep bowing to the pressure to drop a strip mall on every other corner.

That means embracing Assembly Bill 1221, which would lessen local dependence on sales tax and increase municipal funding derived from property taxes. As the powerful allure of sales tax revenue declines, mayors and council members would be free to direct redevelopment funds into low-cost housing -- which in turn would help to generate additional property taxes.

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