Los Angeles County Sales Tax to Increase Oct. 1
A half-cent sales tax increase, Measure ER, will raise the countywide rate to approximately 10.25%.
Los Angeles County shoppers will see a sales tax increase starting October 1, when Measure ER, a half-cent county sales tax, officially goes into effect. This measure will raise the countywide sales tax rate from 9.75% to approximately 10.25%, meaning an additional 50 cents will be added for every $100 spent on taxable purchases.
Measure ER, also known as the Essential Services Restoration Act, was approved by voters in June by a margin of about 24,000 votes. The tax is intended to be temporary, remaining in effect for five years and expiring on October 1, 2031, unless voters approve an extension. County officials estimate this tax increase will generate approximately $1 billion annually. This revenue is projected to help offset billions of dollars in anticipated losses for healthcare and public health funding, following changes in federal Medicaid funding and other reductions.
The measure was proposed in response to federal changes impacting Medi-Cal, California's Medicaid program, and other funding reductions that officials anticipate will strain county hospitals, clinics, and health programs. Certain essential items, such as groceries, prescription drugs, and medical equipment, will be exempt from the new tax.
Supporters of Measure ER argued that the increased funding was crucial to prevent significant cuts to the region's healthcare safety net. However, opponents expressed concerns that the tax would place an additional burden on residents already grappling with the high cost of living in California. Critics also pointed to the regressive nature of sales taxes, which disproportionately affect lower-income households.
Los Angeles County Supervisor Kathryn Barger, who opposed placing Measure ER on the ballot, stated that the tax increase would place an additional burden on taxpayers amid ongoing inflation. Despite her initial opposition, Barger has expressed a commitment to ensuring taxpayer funds are used effectively and has called for oversight of the new revenue.
Supervisors Holly Mitchell and Hilda Solis introduced the measure, with Mitchell describing it as a "last resort" in the face of projected healthcare funding shortfalls. Although the primary focus was on healthcare, Measure ER is a general sales tax, meaning the revenue will go into the county's general fund and its allocation will be determined through the annual budget process. Spending is expected to be subject to annual audits, public reporting, and review by a nine-member Citizens’ Oversight Committee.
The county anticipates receiving the initial Measure ER revenue from the California Department of Tax and Fee Administration on November 1.