As Gov. Jerry Brown walks over to Orange County Employees Association General Manager Nick Berardino Monday afternoon on the lawn of the state capital and picks up his now traditional inaugural hot dog at the OCEA-sponsored People’s Inaugural Party, he asks:
“How are things behind the Orange Curtain?”
Property taxes…vehicle license fees.
That’s what Brown can expect to hear for the foreseeable future from just about every OC legislator, labor leader and public safety official he meets.
And the goal, for the first time in recent memory for California’s most conservative county, is to get everyone on the same page…asking for more.
Based on prodding from Orange County Supervisors’ Chairman Shawn Nelson, county officials recently approved a legislative platform that elevates reversing Orange County’s weak allocation of property taxes (with an estimated return of six cents for every dollar, compared to counties like neighboring LA, which gets more than a quarter) to a number-one priority.
Nelson – along with a host of legislators and labor leaders - spent the better part of last year lobbying Sacramento to get more property tax dollars.
When Proposition 13 was enacted in the late 1970s, it set a baseline for property taxes that left many conservative counties behind because they were predominately rural at the time and didn’t have housing to bolster a strong baseline.
That’s triggered grumbling over the years.
But this year's massive lobbying effort was prompted after Brown’s budget staff found more than $73 million for the state budget in 2012 by reversing an old side deal that OC leaders crafted with Sacramento following the 1994 bankruptcy centered around allocating a special portion of vehicle license fees for debt relief.
When county supervisors refinanced more than $1 billion in bankruptcy debt in 2006, they ignored staff warnings that they might not be able to reattach the special authorization once a refinance was completed. They went ahead with the refinancing anyway and screamed when Brown spotted the VLF money in the budget.
Since then, a host of finger pointing has ensued – at legislators, at the county’s legislative operatives along with its main lobbyist, Platinum Advisors.
But what's changed this year is there is now widespread acknowledgement among the county's leaders that they can't continue to simply rely on local labor leaders to make nice with Sacramento, and that even a conservative government can't be funded with six cents on the dollar.
"We could use all the help we can get," said Nelson. "The folks in OC that are being hurt by the inequity are the poor and our employees. Even if we received the same percentage as the average county we would still be a donor county because our county has a higher per capita revenue generator than most others."
But the road won't be easy, said Assemblyman Tom Daly, who represents central Orange County.
“Given the history, all the twists and turns and timing…and some of the mistakes that have been made in the past, it will be very challenging,” Daly said.
“This has such a convoluted history,” Daly added, harkening back to the days when the OC delegation in Sacramento were called Cave Men for their ability to vote against Democrats and engender deep feelings of resentment from their legislative colleagues.
That’s also where the term, “Behind the Orange Curtain” emanates from.
Former State Assemblyman Tom Umberg still remembers the deep anger triggered when OC legislators opposed funding efforts for Bay Bridge fixes after the 1989 earthquake.
“There is a visceral dislike for Orange County up here in Sacramento,” said Joe Kerr, now retired political director the OC Professional Firefighters, who also was deeply involved in last year’s lobby effort on VLF.
State Assemblyman Matt Harper – who recently won a hotly contested coastal OC seat over the moderate Mayor of Newport Beach Keith Curry – said getting Sacramento to help Orange County when its choc full of Democrats are “stiff odds.”
He believes the best solution to the OC tax woes is twofold. In the short term, Republicans should work with the existing legislature as much as possible. Thinking longer term, however, Harper said Republicans need to stay focused on changing the face of Sacramento by electing more conservatives.
“California is ripe for that kind of change,” Harper said in an interview on the floor of the state assembly.
Daly, who is now Orange County’s senior Democratic assemblyman, is becoming the go-to person for the new legislative agenda even though he laughed a bit when told of the new plan from the county asking, “what’s in it?”
Yet he acknowledges there is a different reality in Sacramento these days and more willingness to work cooperatively, mentioning the efforts of former Assemblywoman Diane Harkey and incoming legislators like State Assemblyman Bill Brough, and newly-elected State Senator Pat Bates, also a former OC Supervisor.
“With the state budget in better shape, there’s hope,” Daly said.
Asked about the Orange County situation at the inaugural, Brown said, “They’ve got some good legislators and they’ll be in to make their case. We’ll work with them.”
However, Brown also warned, “There’s lots of challenges, lots of obligations.”
“We have to appreciate progress was made last year,” Daly said referring to legislation that returned a portion of the VLF dollars. “It wasn’t everything we wanted but it shows that if the right questions are made, progress can happen.”
Senator Kevin De Leon, who is the Senate Pro Tem of the legislature, acknowledged that “I know it’s an issue of inequity.” But he also warned that any solutions have to make fiscal sense.
That’s why, De Leon noted, “human relations are always critical, regardless of ideology.”
Assembly Speaker Toni Atkins, whose hails from San Diego county, another that suffers from the property tax allocation disparity, said “It’s all about the numbers.”
And that’s not just fiscal numbers.
“These discussion take a huge amount of time, lots of bridge building,” Atkins said. “They’ll have to build support.”
Assemblyman Bill Brough – who Daly credits as very focused on the issue – credited Harkey for offering him good briefings on the issue said it’s important for Republicans to frame the issue for their local constituents.
“We need to get more of our tax money back from Sacramento,” Brough said on the floor of the Assembly just before Brown’s oath of office Monday.
Brough said it’s also important to show Sacramento that keeping back tax dollars from Orange County also hurts key friends, such as the county firefighters and sheriff’s deputies union.
Tony Rackauckas, Orange County’s Republican District Attorney, also agreed that getting back property tax dollars should be seen as a bipartisan issue.
Rackauckas recently publicly warned county supervisors during the last budget deliberations that if they continue to cut his budget, it could become tougher to fulfill his constitutionally mandated duties like prosecuting criminals.
“Law enforcement isn’t about partisan politics. It’s about getting the job done,” Rackauckas said after finishing a hot dog on the capital lawn.
Daly believes change will likely come “in small steps” warning that any fix for Orange County means taking from other jurisdictions – largely run by Democrats.
Given that, Daly thinks a “holistic approach” (meaning creating a coalition among other donor counties) has the best chance at success. That, and understanding that deep fixes take time, meaning an approach that spans several legislative sessions.
Kerr said an important approach – which was successful last year – is to at the very least create a baseline and target future incoming dollars.
What is most important is the unity of the delegation in terms of protecting property tax return.
Rackauckas said when it comes to working with Sacramento, there needs to be a steely focus on the goals of delivering services for taxpayers, not ideology.
And that means engaging other officials on a human level.
“We have to work together as people,” Rackauckas said. “People like to do things for people they know and like.”