LA County sales tax could hit 10.25% — among the highest of any major US metro

Board votes on half-cent tax increase

LA County just voted 4-1 to let residents decide on a new sales tax in June 2026.

The plan, called the Essential Services Restoration Act, comes from Supervisors Holly Mitchell and Hilda Solis. It only needs more than half of voters to say yes.

The reason it’s happening now: federal Medicaid cuts are about to hit 3.3 million people in LA County who depend on Medi-Cal — one out of every three residents.

Without new money, the county says it faces a $2.4 billion funding gap over three years.

If voters approve the half-cent tax hike, sales tax jumps from 9.75% to 10.25%, bringing in about $1 billion a year for five years.

Tax would hit California’s legal cap

The half-cent increase would raise the county sales tax from 9.75 percent to 10.25 percent, the highest rate California state law allows. The tax would last five years and expire Oct. 1, 2031. County officials estimate it would bring in about $1 billion per year.

That money would go toward keeping county hospitals and clinics open and staffed. The proposal comes as the county braces for deep losses in federal health care funding over the next several years.

Federal cuts drive the proposal

President Trump signed the “One Big Beautiful Bill” into law on July 4, 2025.

The law cut nearly $1 trillion from Medicaid nationwide, the largest reduction in the program’s 60-year history. L.A. County’s most affected departments face projected losses of $2.4 billion over three years.

About 70 percent of the county Department of Health Services budget comes from federal funding, and that department alone faces roughly $750 million in annual losses.

The shortfall threatens the county’s entire public health system.

About 3.3 million residents rely on Medi-Cal

About 3.3 million L.A. County residents depend on Medi-Cal, roughly one in three people in the county.

That includes nearly one million children. Hundreds of thousands could face lost coverage or reduced access to care.

New federal rules require more frequent eligibility checks and add work requirements for recipients.

County officials warn that without action, emergency rooms could become overwhelmed as people lose access to regular care and turn to hospitals as their only option.

Over 1,000 people lose coverage daily

The losses are already hitting fast. Between July and November 2025, more than 120,000 people in L.A. County dropped off Medi-Cal rolls, an average of about 1,000 people per day.

More than 27,000 children under 18 lost their Medi-Cal coverage in that same period, roughly 200 children per day.

The county also lost more than 70,000 CalFresh enrollees who had been receiving food assistance, and about 27,000 of those were children.

Hospitals would get the biggest share

About 22 percent of the revenue would fund the Department of Health Services to protect public hospitals and clinics.

Another 5 percent would go to the Department of Public Social Services for Medicaid outreach and enrollment, and 5 percent would support nonprofit hospitals in the county.

About 2.5 percent would fund in-home supportive services for seniors and people with disabilities, with another 2.5 percent going to correctional health.

Remaining funds would go where need is greatest, based on emergency department volume.

Oversight committee would track spending

The measure would create a nine-member citizens’ oversight committee to make sure the tax revenue goes where it’s supposed to. Public audits would also keep spending in check.

Supervisors have described the tax as a last resort after other options fell short. About 1 percent of the revenue would support Pasadena and Long Beach, which run their own public health departments.

The oversight structure is designed to build voter trust ahead of the June ballot.

County sales tax already rose in April

L.A. County voters approved Measure A in November 2024 with about 58 percent support.

That measure replaced a quarter-cent homeless services tax with a half-cent tax, and it took effect April 1, 2025, pushing the county rate to 9.75 percent.

The proposed health care tax would add another half cent on top of that. Some cities within L.A. County already have rates above 10 percent when local add-ons are included, so the increase would stack onto an already high baseline.

Critics warn of voter tax fatigue

The Howard Jarvis Taxpayers Association has criticized the proposal, saying the sales tax in L.A. County is already too high and that another increase would hurt those least able to afford it.

The group noted the last half-cent increase for homelessness required special state legislation to exceed the normal cap.

Retired L.A. County Supervisor Zev Yaroslavsky warned of possible voter “tax fatigue” with multiple funding measures expected on upcoming ballots.

The L.A. Firefighters Union is also pushing a separate half-cent sales tax for the city fire department.

Santa Clara County already passed similar tax

L.A. County isn’t the first to try this approach. Santa Clara County voters approved a similar sales tax in November 2025 with 57 percent support, raising the local tax by five-eighths of a cent for five years and generating about $330 million per year.

Santa Clara was one of the first local governments in the country to pass such a measure in response to federal cuts. Contra Costa County is also considering a sales tax on its June 2026 ballot for the same reason.

Backup plan targets November ballot

The deadline for placing a board-sponsored measure on the June ballot is March 6.

If the board doesn’t approve, a coalition called Restore Healthcare for Angelenos plans to gather signatures and qualify the measure for the November 2026 ballot instead.

The coalition includes clinic operators, health care workers, county patients, and public employee unions.

Preliminary polling cited by the supervisors shows about 58 percent of county residents would support the tax increase.

Federal cuts hit California hardest

The impact stretches well beyond L.A. County. Federal Medicaid cuts under H.R. 1 are expected to cost California about $30 billion per year in lost funding.

An estimated 3.4 million Californians statewide could lose Medi-Cal coverage.

The state has already frozen Medi-Cal enrollment for new undocumented adult patients as of January 2026 and plans to impose a $30 monthly premium for some enrollees starting in July 2027.

Local governments across California are now scrambling to find new revenue to fill the gap.

This article was created with AI assistance and human editing.

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