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When Government FailsThe Orange County Bankruptcy$
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Mark Baldassare

Print publication date: 1998

Print ISBN-13: 9780520214859

Published to California Scholarship Online: March 2012

DOI: 10.1525/california/9780520214859.001.0001

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PRINTED FROM CALIFORNIA SCHOLARSHIP ONLINE (www.california.universitypressscholarship.com). (c) Copyright University of California Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CALSO for personal use.date: 23 September 2021

Response to the Fiscal Emergency

Response to the Fiscal Emergency

(p.118) Chapter 5 Response to the Fiscal Emergency
When Government Fails

Mark Baldassare

University of California Press

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

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