The reality of the LA sales tax hike is much worse than you think
On Oct. 1, a new half-cent per dollar sales tax took effect across LA County. It will cost families hundreds of dollars a year. But that’s not even the worst of it.
Here’s the craziest part: By law, not one penny of the new revenue can be spent. If you’re doing a double take after reading that, you are not alone.
LA County raised the sales tax from 9.75% to 10.25% for five years, to raise money to pay for county health care services.
In some areas, where there are additional local taxes, people will be paying even more at the register: 11.25% in Santa Monica, and 11.75% in Palmdale, the highest sales tax in the nation.
I was the lone “no” vote when the county Board of Supervisors placed Measure ER on the ballot. That wasn’t because I doubt that a healthcare crisis exists.
I built my 35-year county career on public health, health services, and mental health policy stewardship. Because the need is so great, nearly three-quarters of our county’s budget already flows to those services.
My concern was about the “who” — who pays. It should not be the working people of LA County.
Rural hospitals are closing, and emergency rooms are overwhelmed statewide, yet the LA County Board of Supervisors wants local taxpayers to backfill what is fundamentally a federal and state responsibility with a regressive local sales tax.
The tax hike comes in what is already one of the most expensive regions in the country, where residents already feel pain at the pump and a squeeze at the grocery store.
But voters weighed in, and 50.6% said yes. That is how democracy works, and I respect it.
Which brings us to a lawsuit. A big one.
On Aug. 31, the Libertarian Party of LA County sued to invalidate the tax hike, challenging Assembly Bill 1768, the state law that allowed LA County to exceed the state’s sales tax cap. The county’s position is that this challenge is without merit, and I share that confidence. The county followed the law at every step. But confidence doesn’t unlock an escrow account.
State law requires the revenue to sit untouched until the lawsuit is resolved, which could take two to three years.
Residents pay the tax. Clinics and hospitals wait. Maybe for years.
Roughly $1 billion a year, meant to cushion patients losing coverage under federal changes, will sit frozen in escrow while LA Health Services, our county’s integrated healthcare system, braces to lose more than $700 million in federal and state revenue by 2028.
So, here we go again, stuck in the land of litigation.
For many residents, this lawsuit may feel like an extension of what already felt unfair: being asked to pay more, and now being asked to wait on top of it. Patients with diabetes or a high-risk pregnancy don’t stop needing care while lawyers argue.
It’s hard to find a silver lining in this situation.
I want to be candid about where our troubles started. The escrow requirement is state law. The funding pressure on our healthcare system is rooted in federal and state decisions.
Too often in California, the state sneezes and the counties catch pneumonia.
That’s why I believe Sacramento should help us out of it. State leaders should work with the county on how to keep the social safety net from tearing apart in the meantime, and provide the care residents desperately need.
While the litigation proceeds through the court process, Los Angeles County residents shouldn’t be left holding the bill for a problem that the state and feds should be addressing.
Kathryn Barger represents the Fifth District on the Los Angeles County Board of Supervisors.
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