The latest sales tax increase in Los Angeles County went into effect Thursday, four months after voters in June approved a half-cent hike to support health care and other essential services.
As of Oct. 1, the Essential Services Restoration Act, or Measure ER, raised the baseline LA County sales tax rate by a half-cent, from 9.75% to 10.25%.
For example, for every $100 in taxable purchases, Measure ER adds 50 cents in tax, bringing the total to $110.25.
The increase is temporary. Measure ER allows the tax to remain in effect for five years until Oct. 1, 2031 as it is projected to generate about $1 billion annually.
But the increase does not apply to groceries, prescription medications and medical equipment.
Revenue from Measure ER is intended to help address reductions in state and federal funding, including changes to Medi-Cal eligibility, and provide health care support for low-income and uninsured residents.
The county said the funding is intended to help prevent people from delaying care and arriving at emergency rooms sicker. Under the county’s initial spending plan, 45% of the revenue would go toward health care for low-income, uninsured LA County residents through nonprofit clinics and other outpatient providers.
Another 22% would go to LA Health Services, the county’s public health care system.
Earlier this year, the LA County Department of Public Health said it had to end clinical services at seven locations because of more than $50 million in federal, state and local funding cuts.
However, after the Libertarian Party of LA County filed a lawsuit challenging the law that authorized the tax, LA County will not be able to spend the funds generated by the sales tax increase while the legal challenge is pending. State law requires the revenue to remain in an escrow account until the case is resolved.
“For patients and families across LA County, Measure ER is a desperately needed lifeline,” said Dr. Christina Ghaly, director of LA Health Services. “People do not stop needing care because funding disappears. They still need cancer treatment, diabetes and high blood pressure medications, prenatal care, immunizations, and a doctor when they are sick.”
If the tax is ruled invalid based on the legal challenge, the state will administer refunds, the county government said.