California State Senator John M.W. Moorlach on Results-Oriented Government
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California State Senator John M.W. Moorlach on Results-Oriented Government

Moorlach on how local and state governments can deal with unfunded pension liabilities, spending, debt, outsourcing and more.

California State Sen. John M.W. Moorlach, a certified public accountant (CPA) by training, started his career in public service in 1994, running for Orange County Treasurer-Tax Collector on the platform that the county’s investment practices would lead to bankruptcy. Although he lost that election, his predictions proved accurate: The county did file for bankruptcy in December that year. After then-Orange County Treasurer Bob Citron resigned, Moorlach served in the post for nearly 12 years, followed by eight years as county supervisor, during which time Orange County was able to emerge from bankruptcy and greatly strengthen its finances.

Since March 2015, Sen. Moorlach has represented the 37th district in Californias’s State Senate, where he has been working to build upon his successes in Orange County to improve the state’s finances.

Reason’s Austill Stuart interviewed Sen. Moorlach on his career in public service, how his accounting background has worked to improve finances in local government, and his plans and challenges for doing the same in California’s state government.

Austill Stuart, Reason Foundation: Looking back to the beginning of your public service, you got involved the 1990s as someone on the outside warning about a possibility of bankruptcy in Orange County that eventually happened, leading you to being appointed as county treasurer. Where did you start trying to right the course on the county’s financial situation? 

California State. Sen. John M.W. Moorlach: Some of the first things we looked at were, should we be outsourcing the investment process? Should we be outsourcing the tax-collection process? And what are we to do with the relationships with outside vendors like the banks, the investment houses and the software underwriters? How do we handle dealing with employees when we needed to downsize?

So one of my first tasks was to reduce my workforce by about 11 percent . You learn quickly that the paradigm in government is not excellence; it’s longevity.  I had to let a lot of wonderful new people go and I was stuck with some of the older people that maybe were not as productive and as innovative, but they were protected by their union. Also, those that had elevated to management did not have union protection, so some really great middle managers had to be laid off. It was really frustrating to deal with the government “last in first out” approach to management.

We looked at the idea of outsourcing our investment process but found it was too costly. Not only was it better from a cost standpoint to hire competent money managers internally, they also were more aggressive in getting better bids than the private sector was. For the idea of trying to outsource the tax collection side of it, that didn’t provide the kind of RFP (Request for Proposals) responses that I was looking for.

There was a firm on the East Coast that was assuming responsibility for collecting taxes for a few counties, but it actually went bankrupt, leaving a lot of counties without the infrastructure to do it internally. We looked at a lot of things, but just letting the staff know we were looking at outsourcing certainly forced them to bring up the level of their game and be more serious that, “Hey, if you want to continue here, we’ve got to prove we can do this cost-effectively and appropriately.” So that was one of the components to what I did to restructure and reform the department. I also worked as just one of many of the officers of the county as a whole to structure a strategy to exit from bankruptcy, so I can’t take a lot of credit. I was just a member of the team.  We worked on ideas and then exited bankruptcy within 18 months.

Then we enacted a lot of other reforms for the whole county. One reform concerned results-oriented government, identifying what our metrics were. What was our job and how do we do it and how do we measure it and compare it to other governments? Or internally? That was a real good process which then led to doing annual business plans for every department, eventually leading to each department completing a 10-year strategic financial plan. So then your business plan and your budget for the next 10 years would fold into the 10-year strategic financial plan. We knew where we were going as a county 10 years ahead, but you were making decisions now that we knew what the impacts would be in the future as opposed to doing budgets every year.

We implemented a lot of fun changes about 12 years later when I became a county supervisor in 2007. We initiated a performance audit department, which did a lot more heavy lifting than, say, an internal audit department. It was more of a managerial function of exploring how certain departments are operating and if they are operating as efficiently as they possibly could, which provided a lot of improvements. Just trying to calm everything down, trying to calm the markets, trying to get a good rate of return, trying to be innovative in investment style.

When I became treasurer, we were very transparent and very visible right from the get-go. We had better communication. We did a monthly report as opposed to a quarterly report. We established an investment oversight committee, which monitored the market a lot more closely.

At that time, Alan Greenspan was the chairman of the Federal Reserve Board. Our game was, “What is Greenspan going to do next? And how can we anticipate it with the duration of our investment holdings?” We were accurate more than 90 percent of the time. So that gave a little bit of added value in the service we were providing. It was a fun opportunity to manage almost $7 billion in funds for the county and its taxpayers.

Stuart: Did the bankruptcy help you get things done that otherwise may have languished as good ideas that sat on the shelf?

Moorlach:  Well, I put a little note on my credenza that said, “Policies, procedures and oversight.” Our focus: How do we run a good shop post-bankruptcy? Having been through a bankruptcy, everybody knew that we were digging out and had to grab the oars and pull. If that didn’t work for them, then other departments or other careers would be their choice. But we were looking for people that could add value.

For instance, I hired a certified cash manager, who came in and started reviewing the banking relationships with the county and we started saving significant amounts of money quickly because the prior administration was sort of sloppy: We had $400,000 a year in banking costs just for our social services agency. We made some dramatic changes in our working relationship with them that they didn’t like at first, but then they realized they were not to be subsidized by every other department in the county. We had a lot of fun getting people to rethink things.

We had a lot of fun getting industry to rethink how they dealt with governmental business. Orange County had 50,000 welfare checks to pay on the first of the month. Most banks didn’t want those people in their banks on the first of the month.

But instead of giving them the checks, why don’t we just give them positive pay cards through the point of sale opportunities and just swipe it through at ATM machines or at grocery stores, etc.? That was a fun exercise, but at the end of the day, we realized the cost savings alone weren’t going to be enough.

But the banking industry knew we were looking because they heard about our efforts with the Federal Reserve Board and the state banking agency. It made them step up to the plate and be a little more cooperative. It provided a little bit of leverage that we weren’t afraid to look outside the box to get something resolved.

We had to really work with industry to rethink what they were going to do in their roll in servicing government work if they wanted the business. We had a lot of fun because of the paradigm. We could force certain companies that maybe didn’t do so well in providing good service before the bankruptcy to step it up. We even encouraged one major national software firm that does investment software to give us a contract. It provided the services for $1 for the first year of the contract just to try to set the relationship right.

Stuart:  What kind of challenges did you run into during the dozen years or so that you served as treasurer before moving to the county board of supervisors? 

Moorlach: You certainly run into the public employee union paradigm, meaning you can’t lay off employees that might have been lagging in their ability to provide a good work product. You just had to learn to live with that. You also learn that it would take a pretty thick file of documentation to remove employees that were not producing to the standards that were expected—a little different than the private sector. Other than that, I didn’t have too much trouble improving things.

The California Legislature was really nervous about us making unique kinds of changes. It was coming from me and out of Orange County. They knew we were trying to make appropriate and necessary decisions and not invest in anything scary or risky because we were now the most conservative portfolio in the state. We had fun trying to be innovative.

One idea we pursued was trying to start our own bank because most of the major banks did not want to have welfare recipients in their branches. How could we issue 50,000 checks on the first of the month?

Stuart: Was there a limit as to how far you could push reform serving as treasurer or treasurer-tax collector?

Moorlach:  There was. When you saw your Board of Supervisors making certain decisions, it was frustrating to say, “Hey, what you’re doing may put future boards in jeopardy because of the financial impact of the policies you’re approving.”

One example was granting retroactive pension benefits, effective 2002, to the date of hire with an improvement of the benefit just because there was a dot-com boom. It was distressing to me and it was one of the few major reasons for me to leave the treasurer position and run for supervisor to see if I could at least do some damage control after the votes were already cast. Because once you give a pension benefit enhancement, you can’t take it back. And, at the time, I was screaming, “This is a lobster trap that you’re walking into. You can walk into it, but you can’t walk out, so don’t do it!”

Three of the five supervisors, all Republicans, voted for another pension increase for the rank-and-file. That’s when I announced I was going to run for supervisor in 2006 because I’d rather be on the dais and at least lose 4-1 than to watch a 5-0 vote on some of these inappropriate fiscal decisions because a lot of elected officials are not business majors or defined-benefit pension plan students. But I had the privilege of serving on the retirement board for the county for close to a dozen years. Certainty, I had my share of actuary presentations to understand how a defined­-benefit plan works. That was a reaction to a dilemma that most of California and the nation face.

Stuart: You’ve said that pensions were a major issue for you in deciding to make the leap over to the county board. Can you maybe explain a little bit more about that issue and what motivates you?

Moorlach: What I decided to do was leave a position that paid a lot more than the county supervisors earned and it was not subject to term limits, which was one of the things a supervisor is subjected to. They are only allowed two terms, so we had to jump in and start swinging right away with a long list of ideas we wanted to implement.

One of the first things we did was address retiree medical care. The county had an unfunded liability of $1.4 billion. We were able to negotiate with the bargaining units. They agreed to make a number of significant changes, which resulted in a 71 percent reduction in the unfunded liability: from $1.4 billion to $412 million, about $1 billion dollars. If we could do the same at the state level, we could reduce an unfunded liability by about $50 billion dollars. It was a great opportunity to attack at that level. Then we had to deal with all the legal onslaughts of “hey, you can’t do this,” because it’s treated as a vested right. We had to go through all the expense and time to have judges rule that the changes were allowable.

Another area we took on: was that, The California Constitution states, in two sections, you have to retire debts in the year they are created. If you can’t pay it off in that year, then you have to get two–thirds voter approval. So we sued the deputy sheriffs, who received the 50 percent increase in their pension benefits. Their pension formula went from 2 percent at 50 to 3 percent at 50. That means 3 percent of their final salary times the number of years on the job. The deal was made retroactive to the date of hire, so their benefits went up dramatically. If they were going to retire before the change with $100,000 salary after 25 years, they were going to get $50,000 a year if they retired. But if they waited a few days for the new formula to kick in, they would have received a pension of $75,000 a year.

The plan had not been actuarially funded for that massive increase, so we said that’s a debt. When you take a fully funded pension plan and you improve the benefits by 50 percent overnight, your plan becomes 2/3 funded. We said the whole one-third is a new debt, liabilities that have to be paid by future boards.

We took that to the local Orange County Superior Court. The forces against us had it moved to an L.A.-area court. Superior Court judges must go up for election every six years. The decision had very poor citations. And when asked how she came to this conclusion, her response was, “Well I’m looking forward to your brief when you file it at the appellate level.” We fought it in the Appellate Court in L.A. on constitutional grounds.

The unions put up a lawyer by the name of Miriam A. Vogel, who had just retired from the appellate court, and who greeted her former colleagues at the court, “How ya doing, how’s it going?” Her position was simple: “They’re going after my pension and they’re going after yours” – and she sat down. In less than two weeks, the Appellate Court ruled the liability was not a liability, but an estimate, though we’ve got an amicus brief from accounting professors from around the nation saying it was a liability.

Then we took it to the California Supreme court, only to have new Chief Justice Cantil-Sakauye, whose husband was a police sergeant soon to retire. They decided not to hear our case, so we lost that battle. Very unfortunate, as we could have saved the state and local municipalities a boatload of grief, burden and money. Gov. Jerry Brown and I had a conversation about the case, and he realized that granting retroactive benefits was crazy. And so, in his Public Employee Pension Reform Act of 2013 (PEPRA), he put a specific provision that they could not grant retroactive benefit increases, so at least we got a little consolation prize.

Another thing we did in 2009, not too long after I got on the board, was address new tiers for new hires. We were probably the first county in the state to do that, which is now common practice with PEPRA. We also set up a new plan, a hybrid, that was partially defined-contribution and partially defined-benefit, but at a much lower formula than what was being offered. This would be available to new and existing employees. However, for current employees, we found ourselves fighting an Internal Revenue Service ruling. If there’s ambiguity in the tax code, the IRS will issue a Revenue Ruling to clarify their position.

Ours was Revenue Ruling 2006-43. The U.S. Treasury was unwilling to change its position, which was basically that you only have one choice—whether or not to make the pension plan selection. Providing a new lower tier was a second choice, and that would disrupt the deductibility of the contributions and the taxability of the pension benefits, by jeopardizing the tax-exempt status of the retirement trust.  So it would be taxable, as pension payments were being contributed; as opposed to when the pension benefits were being received later on in retirement.

We tried to convince the U.S. Treasury and the IRS to change, but we found the national public employee unions were pretty strong and were lobbying the IRS and the U.S. Treasury just as aggressively, if not more than we were. When you deal with the AFL-CIO, the American Federation of State, County and Municipal Employees and the SEIU at the national level, it gets even more interesting. But at least we had a solution for allowing current employees to opt out to a lower pension formula, which would have been a lot of assistance in lowering unfunded liabilities for the county. That’s still being lobbied and addressed even as we speak.

We took on a lot of things that are now kind of normal. But we were very innovative in Orange County in my two terms as a supervisor in starting the conversation and moving the ball forward and encouraging others to do the same.

Stuart: You mentioned trying to put into place a hybrid defined-benefit/defined-contribution-style blended retirement system. Was the objection there that you were trying to make it an option for current employees so then you run into the one-time election sort of issue? Was it that you were trying to create another option that current employees could switch and that was the trigger for the federal disallowance?

Moorlach: There are’ were two issues impacting Orange County. The first was when public safety went from a 2 percent at 50 pension benefit formula to 3 percent at 50. Rank and file positions—as distinct from public safety officers—had a different formula; it was 1.67 percent at 65 and they wanted to get it to 2.7 percent at 55, almost a 60 percent increase. But the supervisors that approved that said you had to pay with an additional withholding for the unfunded liability that was created.

That’s why we didn’t sue those unions; we just sued over the public safety benefit change because they didn’t have a funding source. All these employees that were close to retirement didn’t have to pay much in the way of withholdings because they left the building, leaving it to all the younger employees to pay for their unfunded liability.

That’s usually the way public employee union boards work. It’s the older employees that are represented on their boards and they’re always focused on a benefit for themselves, more than for the younger, newer employees. But the newer employees were saying, ‘‘We don’t want a big pension; we want to pay our mortgages. We want to pay for childcare.’’ So we said, OK, here is a different pension formula, not as aggressive as the older employees are getting, but it will increase your take-home pay because you won’t have to withhold as much, so that was the draw. That was sort of the motivation for helping younger employees.

The pushback we got was the unions had sort of cut a deal. They did not want to see defined contribution anywhere in any form or fashion so they really pushed back with our hybrid plan in the public sector. You see hybrids in the private sector all the time, but in the public sector, they said, wait a second, we don’t even want to talk defined contribution plans.

When Arnold Schwarzenegger was Governor, he had a commission try to figure out such things, to put together lots of wonderful binders. I was on a panel speaking to one of their monthly meetings for the 12 months they were together.

One of the individuals at the table represented the firefighter’s’ association and he mentioned they had converted their retiree medical to a defined contribution plan. And the head of the police officers’ union up and down the state jumped at him and said, “Hey, I thought we had a deal. We said we weren’t going to go defined contribution.” The firefighter union leader had to say, “I’m talking about retiree medical, not the pension plan.” “Oh, ok, thanks.” He let it out of the bag that these guys were unified. There was no way you were going to have a defined contribution component at all. We had that pushback, even though the union—the local union—adopted it.

The other unions around the state and the nation went ballistic over our proposal. We had to fight that and then we had to fight it when this Revenue Ruling popped up. We had a lot of employees who had the choice when they became new employees: you could have the higher formula or the lower formula. We had a high number of new employees select the lower formula. We had a lot of employees that wanted to get out of that higher formula but would still be prevented from doing so because of this Revenue Ruling.

Stuart: Reflecting on your two terms as an elected supervisor, what accomplishments are you most proud and, conversely, what you were unable to accomplish that you really sought out to do and why?

Moorlach: I was really pleased with what we did with retiree medical—it was a massive paradigm shift. It saved the county $100 million dollars a year. By the time I left as a supervisor, the county had saved about the same amount it had lost when the portfolio imploded back in 1994–95. But I felt pretty good that one individual in a team effort was able to somehow recompense the county.

One of the things I tried to do that didn’t succeed was to put a measure on the county ballot in the fall of 2014 that would have allowed for more outsourcing of jobs at the county. Two of my Republican colleagues were running for state Senate: one in a district that had more Democrats than Republicans, so leadership for the Republican Party didn’t want that ballot measure on because they were more concerned about getting back a Senate seat than I was concerned about trying to reduce pension costs.

I had to pace myself over the eight years. That was one strategy I’m sorry I couldn’t implement while I was a supervisor.

Stuart: Do you see a linkage between those two issues, privatization and pensions?

Moorlach: Actuaries assume a certain amount of turnover by new employees that will not vest, so whatever they contributed and whatever the county or the state contributed on their behalf would go into the bigger pot. That’s all factored in trying to calculate what the annual contribution formulas will be for municipalities or anyone that has a defined benefit pension plan.

The day you hire someone, you have a massive liability in that you have to start funding for their pension. But you’re never going to have it revoked or removed because of the “California Rule,” which pretty much says the day you start working is the day that the employer has made a massive commitment to pay for your pension plan. It’s so big and onerous, it’s so unfortunate that more elected officials don’t appreciate the magnitude of just hiring people and taking on this lifetime obligation.

That’s why outsourcing for simple services, and even difficult ones, is much better from a managerial standpoint and a stewardship standpoint than hiring employees and keeping them on, even through difficult times when funding isn’t available, which is certainly something we’ve encountered now that I’m at the state level.

Stuart: Turning to Caltrans, you’ve long pointed to overstaffing issues on the planning and engineering side and the case for more outsourcing. You’ve looked at other states and how they compare to California. Can you maybe explain a little bit more about the situation there and what you would like to see happen?

Moorlach: When I showed up in Sacramento, I was told that the Legislature needed to have a special session to raise a transportation tax so that California could fix roads. We decided we should analyze Caltrans and see what’s going on, because we have state audits finding that they have 3,500 engineers and architects too many on staff, and nearly two-thirds (62 percent ) of the projects that Caltrans finished are over budget. We have a department that’s not as efficient as it could be. We started looking at the metrics and found California spends three times the national average for every mile of road that it maintains and improves: We’re not a four-season state! Michigan is doing much better at maintaining its roads than we are, and they have winters.

So then you ask yourself, “What’s going on?”, and start digging a little more. Then, you realize that Caltrans is being run rather poorly compared to other states.

A good number of states use 50 percent outsourcing, as does the Orange County Transportation Authority when you look at their financial reports and see that half their money goes to pay for salaries, half goes to outside consultants. The state of Arizona is at 80 percent to 85 percent outsourcing; the state of Florida is at 80 percent. California is run by a public employee union, the PECG (Professional Engineers of California Government) who have dictated that there’s no way they’re going to try to eliminate positions or workload, but we said, “Look, 54 percent of your employees are at age 50 or older. They’re already candidates for retirement. You’re going to have a natural attrition that will allow for a migration of work going to outside consultants. By the way, once you get to 50 percent, should funding decrease, you have the ability to eliminate the contracts and save the state money as opposed to hanging on to employees.”

It’s a sad situation where you can’t even move from 10 percent to 15 percent outsourcing in a state where the metrics and the audits coming out of the state’s own auditing agencies—not some independent gadfly group—are already condemning Caltrans’ ability to perform its services. An efficient structure doesn’t include paying $70,000 per mile for administrative costs. How do you in good conscience ask the residents of this state to pay in car registration fees and gas taxes when we’re giving money to a department that is run so inefficiently?

In fact, as you dig into the metrics, you find that of every dollar of funding that goes to Caltrans, only 20 cents hit the pavement. When you look at the last 11 years for the state of California, the budget for Caltrans has averaged about $10.5 billion per year. This state has never made transportation a priority. There’s a different agenda going on here. During that period of time, gas tax revenues have gone up which means that the state has actually reduced its amount of skin in the game and the amount of money that the gas tax has gone up is in the billions.

When we received audit reports while I was a county supervisor for the sixth most populated county in the nation, with a $5.5 billion budget, we were streamlining—enough that if you received an audit report that negative, the department head’s head would have rolled. We would have made massive changes, quickly, as the governing board. I don’t see that happening in Sacramento. I don’t know who the CEO of Sacramento is. If it’s the governor, he hasn’t been moving very quickly to fix Caltrans. If it’s the Legislature, I haven’t seen them move other than to raise taxes and that isn’t the right answer.

Now you’re seeing this problem I foresaw a dozen years ago. I ran for supervisor because you could see that pension obligations were going to crowd everything else out and something is going to suffer. I just think it’s disingenuous that it has to be roads, because that’s where taxpayers feel it the most. I think the average Californian pays about $700 a year just for damage to their cars because of a condition of the roads; it’s a crime. That’s what happens when the employees start to run the company and they run it for their benefit, not the benefit of the customers. In the private sector, once employees run the company for themselves, that’s a company that’s a candidate for bankruptcy.

Stuart: You mentioned earlier that, when you came into county office as supervisor, you had a list of reforms you wanted to implement. Did you walk into your service at the state level with a similar mindset? If so, what does your list of your reform priorities look like?

Moorlach: I definitely wanted to see what we could do with retiree medical and to fix the pension issue— I’m really concerned about the fiscal condition of the state. The state’s comprehensive annual financial report, the CAFR, which contains the basic financial statements of the state, in 2018 shows an unrestricted net deficit of $168.5 billion dollars. That’s a massive number, and the per capita puts California in 46th place based on the 2011 or 2012 numbers and 42nd based on the 2018 numbers. We’re in the bottom states—thanks to such states as Illinois, Connecticut, Massachusetts and New Jersey, we’re not last.

When I was elected as a county supervisor, the unrestricted net assets showed a $30 million deficit. When I left in 2014, it was a $300 million surplus. I left Orange County in much better shape than I found it—both as treasurer and as supervisor. I have 20 years of experience running a major municipality, so I know what needs to be done.

By the time I’m done as a state senator, I want to say that we’ve created a stronger balance sheet. That’s got to be done by looking at everything more globally, rather than just saying we need a tax for this and a tax that, the tobacco tax for this, and a gas tax for that.

We need to look at the whole picture and say how do we run this state with the revenue sources that we already have? How do we address the liabilities? How do we address improving this balance sheet? That’s sort of my game—I’m the only certified public accountant out of 120 elected legislators.

I don’t have specific goals like I did when I started, and before I was sworn in as a supervisor. But I have five broad categories of focus: pensions, retiree medical, unrestricted net assets, no new taxes, and knock off the nonsense. We don’t need high-speed rail. We don’t need to fix global warming out of California. We’re dealing with some massive projects and ideas that have nothing to do with making California solvent. In fact, it’s the opposite. It discourages business from staying here. Voters cannot figure out why we’re not building dams instead of high-speed rail. We’ve got to illuminate to the Legislature and the governor that some of these priorities are out of whack and need to be adjusted.

Stuart: For clarification, when you talk about unrestricted net assets being negative, can you describe in layman’s terms who may not know what that means?

Moorlach:  When you run a business, you have assets and you have liabilities and the difference is retained earnings. In government world, we call that number net assets, which are comprised of four different numbers. The first is, you pull out of the net assets your fixed assets like roads, administration halls and pipes, because you really can’t sell them off; I mean, you could, but it would be difficult. You might be able to securitize them. You pull that big chunk out.

Then you pull out money that belongs to others. In the case of Orange County, we have federal and state funds in our bank account that haven’t been spent yet for social programs, so you pull that out. Then you pull out any business-type activities. Government has two components: one is government related and the other is non-government related. Government related is all that activity you do based on receiving taxes and performing the services you’re supposed to. Non-government business-type activities are when you run some kind of business that’s an enterprise. In Orange County, we have an airport and a landfill system, and the county is not allowed to take money out of those two systems because, in the case of the airport, the FAA doesn’t allow the airport to be a profit center, and the county landfill cannot either. We’re responsible for them, but they’re not supposed to be a revenue generator for the county.

You pull out those net assets, and then you come to the final number. Usually, it’s called unrestricted net assets and it’s on the balance sheet and it’s there in black and white. You will see that for a lot of municipalities it’s negative, which means they have more debt than they should. With this and the de-risking going on at CalPERS, you’re seeing a lot of newspaper articles showing how bad the financial situation is becoming for city X and county Y and it’s not pretty.

The horses are already out of the barn but now we’re actually accounting for it and showing the historical impact of what this is doing to these counties and other special districts. Hopefully, it will start waking up the state and the nation to the dilemma that we’ve found ourselves in.

Stuart: You’ve now had 20-odd years or so in public service pushing for reform. What are some lessons learned and what advice would you offer to those who might be following in your footsteps getting into government today, especially with respect to how to push reform and the limits of doing so?

Moorlach: I would love to challenge individuals with MBA’s and CPAs and CFPs and other professional designations. To think about running for elected office, which means they have to make significant sacrifices in family time and earning capacity to help their fellow citizens. We need a lot more fiscal brains in elected office. People that really understand how balance sheets and income statements work and can analyze a budget. I’d love to encourage people with fiscal backgrounds to get involved.

A lot of accountants tend to be kind of quiet and introverted individuals. They’re not really accustomed to a public limelight. I would say, if you have that skill set, you are desperately needed to be the adult in the room when it comes to a lot of the financial silliness that’s occurred because of pensions and other promises being put in the shadows and now finally coming out to the light of day.

I would add that it’s a big chore to step up and disagree with public employee unions—be prepared for an unpleasant campaign. Take heart in spite of all the negative mail, TV commercials and all the other things you might have to endure, you’re a part of the solution for resolving and reforming government so that we don’t give a massive debt to our kids, our grandkids and our great-grandkids. Because, by doing nothing, this nonsense just continues.

We must educate critics to help them understand that they’re not going to be able to pursue their programs if they don’t pay attention to the nickels and dimes as they’re putting their budgets together. There are trends. You need to watch the trends and what they’re doing to push other programs out. That’s the job—trying to message and communicate so they understand the ramifications of their decisions.

John Moorlach has represented District 37 in the California State Senate, which includes portions of Orange County, since March 22, 2015. His career in public service began over two decades ago, when the Orange County Board of Supervisors appointed Moorlach to serve out the term of County Treasurer-Tax Collector following the county’s bankruptcy, which he predicted would happen.

After being re-elected to County Treasurer-Tax Collector twice, in 2006 voters elected John to serve in his first of two terms on the County’s Board of Supervisors, where he continued his focus on reforming the county’s budget practices and sounding the alarm on the county’s growing unfunded liabilities.

Prior to serving as Orange County Treasurer-Tax Collector, John Moorlach was a Certified Public Accountant, Certified Financial Planner and Vice President of Balser, Horowitz, Frank & Wakeling, an Accountancy Corporation, and was the administrative partner of its Costa Mesa office.

A 1977 graduate from California State University in Long Beach, Moorlach was recognized in 2014 as the CSU Long Beach College of Business Administration Alumnus of the Year. Moorlach passed the C.P.A. exam in 1978 and completed his studies for the Certified Financial Planner designation in 1987.