Last weekend Orange County Supervisor John Moorlach claimed in a OC Register editorial (here) that the County is again on the verge of bankruptcy. Moorlach wrote:
The county of Orange, which went bankrupt in 1994, is a bankruptcy candidate again.
The county has renegotiated its retiree medical in 2006 and 2007, reducing it by $1 billion. It also negotiated new pension tiers for new hires; increased withholdings for employees that, until recently, had the county paying their entire employee portion of the pension contribution; and froze pay raises for three years. The County’s voters approved Measure J, requiring voter approval before any future negotiated retirement benefit can become effective. The county even negotiated a voluntary opportunity for current employees to opt down to the lower pension formula offered to new hires and offers a defined-contribution plan as an incentive. Unfortunately, the Internal Revenue Service is obstructing this option.
What Moorlach seems to forget is that the myth of his powers of prediction has exceeded reality. The “Myth of Moorlach” is kind of like the “Myth of Ronald Reagan” being an ultra-conservative tax fighter, even though he raised taxes numerous times during his presidency. Few people know that it was not actually Moorlach who discovered the fact that Orange County investments were standing on the brink of collapse in 1994. Moorlach was merely the face of a man behind the curtain. Former Moorlach ally and Treasurer-Tax Collector Chriss Street was the one who told Moorlach of the prediction, which he used as a theme for his campaign for the Treasurer-Tax Collector job. Moorlach is a CPA, not an investment expert.
Yesterday, Auditor-Controller David Sundstrom made it clear that he doesn’t see bankruptcy for Orange County on the horizon. Sundstrom told the OC Register:
“I think we’re in a strong financial position,” Sundstrom told us. “I don’t believe the county is on the brink of any fiscal calamity.”
To be clear, Supervisor Moorlach has an agenda. It is an agenda designed tospread false fear. It is a political agenda to attack public employees and their benefits. But if anyone still believes in Moorlach’s predictive powers consider how well his last great prediction turned out.
Moorlach predicted that the courts would rule that retirement benefits granted to Sheriff’s Deputies were unconstitutional. He claimed that a lawsuit would save the taxpayers hundreds of millions of dollars. HE WAS WRONG, and his prediction will ultimately cost the taxpayers in the neighborhood of $5 million.
No, The Sky Is Not Falling.