LA County sales tax increase goes into effect next week: What to know about Measure ER hike

Los Angeles County shoppers are about to get another jolt at the checkout counter. 

A new half-cent county sales tax approved by voters earlier this year is set to take effect Oct. 1, pushing the countywide rate from 9.75% to approximately 10.25%, or an extra 50 cents for every $100 in taxable purchases, according to Los Angeles County Public Health.

Measure ER is technically a general sales tax, meaning its proceeds flow into the county’s general fund and allocations are determined through the annual budget process. Kimberly Reinick – stock.adobe.com

Measure ER, dubbed the Essential Services Restoration Act, passed in June by roughly 24,000 votes, according to NBC.

The temporary tax will remain in place for five years, expiring Oct. 1, 2031, unless voters approve an extension.

County officials estimate the increase will generate in approximately $1 billion annually as Los Angeles braces for billions of dollars in projected healthcare and public-health funding losses. This comes on the heels of Gov.Gavin Newsom signing the state budget in June, which was nearly $352 billion.

The county says Measure ER was proposed in response to federal changes affecting Medicaid, known as Medi-Cal in California, and other funding reductions that officials expect will put additional pressure on county hospitals, clinics and health programs.

The temporary tax will remain in place for five years, expiring Oct. 1, 2031, unless voters approve an extension. NBC

The new tax won’t apply to certain essentials, including groceries, prescription drugs and medical equipment, according to the county.

While supporters argued the cash infusion was necessary to prevent deeper cuts to the region’s healthcare safety net, opponents warned residents already getting hit by California’s sky-high cost of living could not afford another tax.

CalMatters reported that critics also pointed to the regressive nature of sales taxes, which can consume a greater share of lower-income households’ earnings.

Supervisor Kathryn Barger, the only member of the Board of Supervisors who opposed placing Measure ER on the June ballot, said after its passage that the increase would put an “additional burden” on taxpayers amid inflation.

LA County Supervisor Kathryn Barger was the only member of the Board of Supervisors who opposed placing Measure ER on the June ballot. Billy Bennight/ZUMA / SplashNews.com

But Barger said she respected voters’ decision and would push for oversight of the new revenue.

“Taxpayers deserve to know how these funds are being spent, whether promised outcomes are being achieved,” Barger said in a statement reported by NBC.

The measure was introduced by Supervisors Holly Mitchell and Hilda Solis. Mitchell described the tax as a “last resort,” according to CalMatters, as county leaders confronted anticipated healthcare funding shortfalls.

Although healthcare was central to the campaign, Measure ER is technically a general sales tax, meaning its proceeds flow into the county’s general fund and allocations are determined through the annual budget process.

Spending is expected to face annual audits, public reporting and review by a nine-member Citizens’ Oversight Committee.

The county expects to begin receiving Measure ER revenue from the California Department of Tax and Fee Administration on Nov. 1.

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