The Los Angeles County Board of Supervisors on Tuesday, July 7, officially authorized implementation of a half-percent (0.5%) sales tax bump that county voters inched across the finish line by less than a percentage point in the June 2 primary election.
Measure ER, the Essential Services Restoration Act for Los Angeles County that passed with 50.64% of the vote and begins Oct. 1, raised the sales tax for all 88 cities and county unincorporated communities, with many cities going over the 10% threshold.
The new tax will continue until Oct. 1, 2031, when it sunsets. It was placed on the ballot by the board in February, led by Second District Supervisor Holly Mitchell and co-sponsored by First District Supervisor Hilda Solis.
Its purpose is to raise dollars for propping up county healthcare services in hospitals and at private, nonprofit clinics to restore what was cut by H.R. 1, the so-called “Big Beautiful Bill” that became law a year ago and eliminated Medi-Cal coverage to hundreds of thousands of L.A. County residents and sharply slashed funding for county hospitals and clinics.
“Measure ER is essentially a lifeline to sustain the L.A. County safety net. It will save a lot of patients from dying,” said Jim Mangia, president and CEO of St. John’s Community Health Clinics, which operates medical, dental and mental health services to 144,000 patients a year at 25 clinic sites in L.A. County. Mangia led the Yes on ER Coalition.
The procedural motion directs the county Chief Executive to contract with the California Department of Tax and Fee Administration (CDTFA) to administer the tax. The CEO can also examine the CDTFA books to make sure businesses are charging the tax and its being collected.
“Today we moved to adopt the required resolutions and state agreements to begin implementing the voter approved ½ cent tax and ensure we are upholding our commitment for this temporary tax to begin by October 1,” said Supervisor Mitchell, in a prepared statement released after the vote.
In the truncated first year, the tax is estimated to produce $808 million from October to June 2027, minus county administrative set-up costs of $175,000. For the following four years, each full year is predicted to produce $1.08 billion.
“Measure ER will support the county’s commitment to providing essential county services such as healthcare for county residents and reducing the risk of service cuts, including the potential closure of the county’s four public hospitals and healthcare provider layoffs,” read the implementation motion.
Last month, David Green, president of SEIU 721, one of the members of a Yes on ER Coalition, called the Trump-backed measure the largest federal cuts to healthcare in Los Angeles County in U.S. history. The county is poised to lose $2.4 billion in healthcare funding over the next three years. Federal cuts affect 3.3 million low-income county residents who rely on federally funded Medi-Cal for healthcare services provided by the county.
The county has already seen 400,000 residents lose their Medi-Cal coverage, with the bulk of the cuts still to come from a multi-tiered law spread out over several years. The latest round of cuts are set to take place in early 2027, Mangia said.
Revenues from sales tax won’t be distributed until January 2027, around the time when more low-income residents lose health care coverage. “So this is just in the nick of time,” he said. “The vote of the board to move forward on implementation is the first step to putting into place the (tax) mechanism.”
A spending plan approved by the board apportions funding by percentage. The largest piece of the pie, about 47%, goes to fund healthcare clinics that will provide free or reduced costs care to low-income residents. For those patients who lost their insurance, the clinics have to pay for the coverage while Medi-Cal reimbursements are unavailable.
This includes primary care, but also referring patients to specialist doctors and hospitals and providing prescription drugs, he said.
That will remain the situation for about the next six months, as clinics raise money and spend down reserves to pay for continuing coverage until funding flows from Measure ER around January, re-establishing Medi-Cal reimbursements and coverage, Mangia said.
Many patients have expressed joy over the passage of the measure, which is now being implemented, he said.
“Patients have called us to say: ‘Thank you. You saved our family.’ One said to us: ‘Now my grandmother will be able to see the doctor,’ ” he said.
In L.A. County, the healthcare system is multi-faceted, he explained. This includes county Department of Health Services and Department of Public Health, many county clinics, four county hospitals, public health services such as free vaccines and screenings for infectious diseases, plus a network of 600 private, nonprofit clinics.
One of the benefits of the Measure ER dollars will be to bring those who fled to county and private hospital emergency rooms back to the county and to the clinics, Mangia said.
“The hospitals say the benefit of primary care at clinics is to keep people out of the emergency rooms,” Mangia said. “This will stop more low-income folks from using emergency care (for primary care visits),” something he said benefits all county residents and saves money.
The measure faced strong opposition from anti-tax groups, but also from cities, who didn’t want to see their sales taxes raised. Many wrote letters, saying countywide sales taxes in which the money goes into the county general fund provide no guarantees they will help their residents.
Many said this will make it harder for them to see their local tax measures get approved. Sales tax rates in Lancaster and Palmdale are at 11.25% and in October, their residents will be paying 11.75%. Los Angeles will see a rise from 9.75% to 10.25%. Many cities will go from 10.5% to 11% on Oct. 1.
A separate motion expected by the end of the month will ask the board to vote on giving the county the authority to distribute contracts and grants for healthcare agencies and clinics. That was pulled from Tuesday’s motion “to give the public more time to weigh-in on this important component,” said Mitchell.
The pre-approved revenue allocation plan also includes:
• 22% for the county Department of Health Services for funding of county public hospitals and clinics
• 10% for the county’s Department of Public Health
• 5% each for school-based health needs and programs; and to the county Department of Public Social Services for Medi-Cal outreach, enrollment support and volunteer programs
• 2.5% for correctional health services
• 2.5% for in-home services for the elderly and those living with disabilities. This also includes increasing wages and benefits for providers
• 1% for the City of Pasadena Public Health Department and the city of Long Beach Department of Health and Human Services for safeguarding public services