When Government Fails: The Orange County Bankruptcy
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It is rare for a local government to declare bankruptcy, and even rarer for a government that is one of the fastest growing, richest counties in America. When Government Fails: The Orange County Bankruptcy by Mark Baldassare is a compelling account of how voters’ fiscal conservatism and the pressure for high-quality public services came into conflict. This story is being played out in numerous local governments throughout California and, increasingly, throughout America. As California legislators and administrators at the city and county levels struggle with severe restrictions on their ability to raise local revenues, recently tightened by the passage of Proposition 218, the temptation to search for “creative solutions” will only intensify. Orange County’s creative solution was dramatic, short-lived, and risky—a gamble with the taxpayers’ money and trust. Like most gambles with the public trust, it did not pay off.
Mark Baldassare joined the Public Policy Institute of California (PPIC) as a visiting fellow with a commitment to analyze what had happened in Orange County and to place that experience in the broader context of changing local government in California. He is uniquely positioned to carry out such a study, given his many years as a recognized scholar on suburban America and his thorough knowledge of Orange County gained from his experience as director of the highly regarded Orange County Annual Survey. Dr. Baldassare’s identification of the importance of the bankruptcy for the future of local government finance in California makes the study a natural complement to the evolving research agenda of PPIC.
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