Chapter

Response to the Fiscal Emergency

Mark Baldassare

in When Government Fails

Published by University of California Press

Published in print January 1998 | ISBN: 9780520214859
Published online March 2012 | e-ISBN: 9780520921368 | DOI: http://dx.doi.org/10.1525/california/9780520214859.003.0005
Response to the Fiscal Emergency

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This chapter looks at the response to the fiscal emergency in Orange County. It shows how the county government reshaped itself to overcome its fragmentation and how scores of local governments managed to work together despite their local orientation. The public's reaction to the ongoing fiscal crisis is also of interest, since the fate of a tax increase for bankruptcy recovery would be in their hands. What also emerges is a new role for the state government. There would be no state loans or financial help, as was the case in New York. California was in no position to offer a bailout to Orange County. The county government needed someone to manage the Orange County Investment Pool. They called on the former state treasurer, Tom Hayes. Hayes was able to sell off the risky securities and transform the pool into a safe money-market fund in about a month. The Measure R sales tax was the centerpiece of the investment pool settlement and critical to the county's efforts to avoid a default on bond payments.

Keywords: Orange County; bankruptcy; fiscal crisis; Investment Pool; fiscal emergency; local governments; loans; Tom Hayes; Measure R; sales tax

Chapter.  13285 words. 

Subjects: Social Research and Statistics

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