Why some cities won’t be paying Los Angeles’ new homeless tax
Los Angeles County’s sky-high sales tax will rise not once, but twice, this year.
In recent elections, Angelinos voted two new tax hikes upon themselves — one to fund transportation (Measure M) and the other to fight homelessness (Measure H).
As a result, the county’s 8.75 percent tax rate jumped to 9.25 percent on July 1. It’ll rise even further — to 9.5 percent — on October 1.
Of course, some cities in Los Angeles County have even higher tax rates. Seven of them — Compton, La Mirada, Long Beach, Lynwood, Pico Rivera, Santa Monica and South Gate — have rates of 10.25 percent that are among the highest in California, if not the entire nation.
Here’s where it gets interesting: Rather than increase their tax rates another quarter cent on October 1 like the rest of the county, those seven normally tax-loving cities will get a free pass — at least for now — in funding the fight against homelessness.
The seven cities will, of course, benefit from the estimated $355 million in annual tax payments the measure will raise but they will do so only by the courtesy of taxpayers in other cities. It’s a subsidy, plain and simple.
Why was Measure H drafted this way?
It appears to have been a rather clumsy attempt to dodge a state law capping local sales taxes. The law requires localities to limit voter-approved “district” sales taxes to 2 percent (on top of the state rate of 7.25 percent) unless they obtain specific legislative authorization.
Los Angeles County has received legislative approval twice in the past to increase this limit for transportation-related taxes. For some unknown reason, Measure H proponents didn’t want to bother with this step.
But the poor planning came back to bite them. Proponents claimed the new tax would take effect July 1, at the same time […]