LA County Supervisors approve motion that could increase sales tax to cover healthcare funding cuts

The Los Angeles County Board of Supervisors on Wednesday approved a motion that could increase the sales tax by a half-cent in order to cover the massive healthcare funding cuts made by the Trump administration. The decision will now fall on LA County voters in June. 

The current sales tax stands at 9.75%, but it's even higher in some cities within Los Angeles County. If the measure, which is called the Essential Services Restoration Act and was proposed by Supervisors Holly Mitchell and Hilda Solis in January, is approved and reaches voters, the county's baseline sales tax would rise to 10.25% through 2031. 

The decision was made after an hours-long debate during Wednesday's meeting, which ended in a 4-1 vote with only Supervisor Kathryn Barger dissenting. 

She shared a statement on the motion's approval after the meeting, saying that "backfilling federal funding cuts on the backs of county taxpayers in not acceptable."

"Los Angeles County residents are already stretched thin. Last year, Bloomberg News reported that Los Angeles now has the highest sales tax rates of any major metropolitan region in the nation," Barger's statement said. "This proposed half-cent increase would push us even higher, making our county less affordable for families and less appealing for consumers to shop and businesses to operate. We are risking imposing higher everyday costs and small businesses and employers choosing to leave Los Angeles County altogether."

While supporters say it could generate a billion dollars in revenue and prevent hospitals and clinics from closing, opponents say the sales tax is already too high. 

"The motive for this is understandable," said Zev Yaroslavsky, a retired Los Angeles County Supervisor. "They're trying to backfill some of the lost revenue that comes from the federal government for healthcare. The danger is, there may be financing fatigue or tax fatigue on the part of the voters."

The proposed increase comes as SEIU, otherwise known as Service Employees International Union, pushes for state legislators to approve a one-time tax on California's billionaires to also cover the federal healthcare funding cuts. 

"More taxes is very burdensome for the people of LA County. Also, it makes LA County less competitive compared to other counties," said Susan Shelley, the vice president of communications for the Howard Jarvis Taxpayers Association. "People can't cross the border and shop in a county that hasn't done this. So, I think all the stores, restaurants, fast food outlets; they will all feel the impact."

Yaroslavsky said that there could be a lot of funding measures on the ballot this year, including one proposed by the Los Angeles Firefighters Union to ask voters to approve a different half-cent sales tax increase in the city. They began collecting signatures for the proposal last month. 

"For the fire department in the city of Los Angeles, for possibly parks and recreation. There's also a cap on how much local government can raise the sales tax. They made state legislation to allow them to do that," Yaroslavsky said. 

CBS LA has reached out to the co-authors of the Los Angeles County measure, one of whom said they were not available, while the other didn't respond.