Los Angeles County Rolls Out New 10.25 Percent Sales Tax
Los Angeles County, California, instituted a new 10.25 percent sales tax on Thursday, four months after voters approved an increase back in June.
“The Essential Services Restoration Act,” also known as Measure ER, increased the rate from 9.75 percent to pay for healthcare costs and other local services, according to KNBC-TV.
Earlier this year, supporters framed the ballot measure as a way to supplement federal funding losses from President Donald Trump’s “Big Beautiful Bill.”
The measure has a sunset provision and will remain in effect for five years until Oct. 1, 2031, but it’s still expected to generate $1 billion per year.
The increase, however, will not affect prescription drugs, medical equipment, or grocery goods.
Some 45 percent of the tax revenue will be funneled through nonprofits and outpatient clinics to help cover the healthcare needs of underinsured and low-income residents.
Another 22 percent will go to LA Health Services, which is the county’s public health system.
The county’s public health department said it has lost $50 million in federal, state, and local funding from recent fiscal cuts.
The funding cannot be dispersed yet, however, after the Libertarian Party of Los Angeles County filed a lawsuit challenging the new tax.
As the case makes its way through the courts, any revenue collected through the sales tax will stay in limbo until the issue is fully resolved.
If the tax is invalidated, refunds will be dispersed.
Dr. Christina Ghaly, director of L.A. Health Services, said, “For patients and families across LA County, Measure ER is a desperately needed lifeline.”
“People do not stop needing care because funding disappears,” she added. “They still need cancer treatment, diabetes and high blood pressure medications, prenatal care, immunizations, and a doctor when they are sick.”
Californians already face some of the highest taxes in the nation. The state’s income tax is the highest in the country at 13.3 percent.
Earlier this week, a CNN reporter called out Democratic Gov. Gavin Newsom for his poor management of the state after she interviewed a business owner who was forced to close his restaurant in a hostile economic and regulatory environment.
Senior national correspondent Kyung Lah interviewed local Los Angeles business owner Tom Sopit, whose restaurant survived the COVID lockdowns but is now closing due to crushing regulations, labor laws, and high costs.
Sopit called it a “death by a thousand cuts.”
“The cost of goods, the cost of labor is much higher than everyone else in the country,” he said. “Insurance is a big part of it, with the wildfires controlling the premiums and increases, all the carriers leaving the state, and that’s why it went up so quickly.”
“I think you can’t just keep taxing businesses and people,” Sopit explained. “How are we just keep paying more taxes, but somehow the state just keeps going downhill? That doesn’t make sense.”
When Lah was asked about her interview by CNN’s Dana Bash, she said, “The fees for businesses, the regulations that restrict you from being able to build stuff. All of it is just crushing.”
She added, “These Democrats today are looking at generations where they can’t have what their parents have. Sopit’s parents, who were immigrants to this country, had a business in Los Angeles, a restaurant, and their son could not do the same thing. And that is going to chase these candidates, and, frankly, it’s going to chase Gov. Newsom as he seeks higher office.”
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