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Los Angeles County sales tax rises to 10.25% today, but lawsuit freezes every dollar
Voters approved Measure ER by a razor-thin 50.64% in June; the half-cent sales tax takes effect October 1, lifting the countywide rate to 10.25% — but a lawsuit has frozen the revenue in escrow.
Why it matters
Measure ER takes effect today across Los Angeles County, raising the sales tax to 10.25% — one of the highest rates in the nation — and adding about $1 billion a year in new revenue earmarked for hospitals and public health. But a legal challenge means not a single dollar can be spent yet: by state law, the money must sit in an escrow account while the lawsuit plays out.
Full report
Voters narrowly approved Measure ER in June with 50.64% of the vote, authorizing a half-cent sales tax increase to offset federal funding cuts to public hospitals, nonprofit clinics, and public health programs. Effective October 1, the countywide rate rises from 9.75% to 10.25%. With local city add-ons, rates reach 11.25% in Santa Monica and 11.75% in Palmdale and Lancaster, approaching 12% in some areas. Groceries and prescription drugs remain exempt.
The tax carries a five-year sunset clause, expiring October 1, 2031, and the county projects roughly $1 billion in annual revenue. But the money is frozen: the Libertarian Party of Los Angeles County has sued to challenge the tax's legal authority, and state rules require the revenue to be held in escrow during the litigation — so the county cannot spend any of it for now.
Critics, including Republican Supervisor Kathryn Barger and the Howard Jarvis Taxpayers Association, argue the hike raises the cost of living and hits low-income residents hardest. Supporters say the funding is essential to keep the county's public health system afloat as federal dollars shrink.
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