By Stephen Witt, Los Angeles County Politics
Los Angeles County shoppers began paying a half-cent more in sales tax Oct. 1 under Measure ER, but the county can’t spend a dime of it while a lawsuit from the Libertarian Party of Los Angeles County works its way through the courts.
The suit, filed Aug. 31 by the party and Shawn Osborne, doesn’t target Measure ER directly. It challenges the constitutionality of AB 1768, the state law that allowed the county to exceed the normal cap on local sales taxes. If the courts strike down AB 1768, Measure ER falls with it, and the money collected in the meantime would be refunded.
Voters narrowly approved Measure ER in June with 50.6% of the vote, over opposition from a coalition of 18 cities, including Calabasas, Malibu, Glendale, Carson and Arcadia, as LACP reported in May. The cities also opposed AB 1768, which had not yet been signed into law when voters were asked to approve the tax.
The new tax is projected to raise about $1 billion a year for five years. Under the county’s plan, 45% would go to community health clinics and 22% to county hospitals and clinics. The county had planned to begin distributing the money in January 2027, when another round of federal health care cuts is expected to hit.
“This meritless lawsuit is a deeply offensive attempt to stop funding that is urgently needed to deliver lifesaving health care services across the largest county in the nation and to our most vulnerable residents,” said Los Angeles County Supervisor Holly J. Mitchell (D-Inglewood, Hawthorne, Gardena, Compton, Carson), who led the push to put Measure ER on the ballot.
State law requires the county to hold the new revenue in an escrow account while the case is pending. County officials said the litigation could take two years or longer. Unless the lawsuit is withdrawn, residents keep paying the tax, but it won’t fund services.
Mitchell said nearly 380,000 county residents have already lost full-scope Medi-Cal under H.R. 1, the federal budget law, and county departments project 700,000 more will lose coverage next year. County officials said the lawsuit does not affect residents’ current Medi-Cal or CalFresh eligibility.
The tax raised the county’s base sales tax rate from 9.75% to 10.25%. Lancaster and Palmdale now have the county’s highest rate, at 11.75%.
Even one of the measure’s sharpest critics says the lawsuit lacks merit. Los Angeles County Supervisor Kathryn Barger (R-Palmdale, Lancaster, Santa Clarita, Pasadena, La Cañada Flintridge) cast the lone vote against putting Measure ER on the ballot. In an Oct. 2 op-ed in the New York Post, she wrote that she shares the county’s confidence in the case and that the county followed the law at every step. But she noted that confidence alone won’t release the escrowed money.
Others who fought the tax see the narrow margin as a warning. Aidan Chao, chairman of the Los Angeles County Taxpayers Association, which led the opposition campaign, said voters did not hand the county a mandate.
“This is by no means a resounding endorsement of measure ER from Angelenos,” Chao told LAist.
Libertarians have won this kind of fight before. In 1991, the California Supreme Court struck down a San Diego County sales tax for jails and courts in a case brought by taxpayers who were Libertarian Party members.
Mitchell vowed the county will fight the suit.
“The voters have spoken, and their decision must be respected and upheld,” said Mitchell.
