LA County Sales Tax Rises to 10.25% Following Voter Approval of Measure ER
A half-cent increase adds to consumer costs, with critics alleging a misleading campaign led to its passage.
A new half-cent sales tax in Los Angeles County took effect Thursday, raising the countywide rate to 10.25% after voters narrowly approved Measure ER. The increase adds 50 cents to every $100 spent, impacting an estimated $1 billion in consumer spending annually.
The measure, which secured passage with 50.64% of the vote in June, was put on the ballot by the Democrat-controlled LA County Board of Supervisors. Proponents, including health organizations and unions, stated the revenue was crucial to keep hospitals and clinics open amidst potential funding cuts. The SEIU, a union representing county workers, indicated the tax would protect jobs.
However, critics, such as Adan Chao of the Los Angeles Taxpayers’ Association, argue that the measure was passed through a $10 million campaign that was deceptive. Chao stated that voters were led to believe the tax was solely focused on healthcare and would be temporary, when in reality, it is a general tax with no sunset clause. County Supervisor Kathryn Barger, the sole Republican on the board, opposed putting the measure on the ballot, expressing concerns that the funds might not be spent as intended and that residents already face a high tax burden.
The total sales tax rate in some cities within the county now exceeds 11%. For instance, West Hollywood and Pasadena have a rate of 11%, while Santa Monica's is 11.25%. The tax applies to restaurant meals but exempts groceries and prescriptions. Critics contend that such taxes disproportionately affect lower-income residents.
This is the second sales tax increase in LA County in less than two years, following the approval of Measure A, a half-cent tax for homelessness initiatives, in 2024. Measure ER passed with a simple majority, which critics suggest was a strategy to avoid a higher threshold required for taxes specifically earmarked for healthcare.
Groups that stand to benefit from the revenue were significant contributors to the campaign supporting Measure ER. St. John’s Community Health, a nonprofit clinic chain, reportedly contributed at least $4 million. SEIU Local 721 provided $200,000, and the California Community Foundation and the county’s doctors’ group also made contributions.
Shortly before the tax's implementation, the Libertarian Party of LA County filed a lawsuit seeking to overturn Measure ER, citing its alleged deceptive marketing as a primary reason for opposition.