Los Angeles County raises sales tax to 10.25% for health care funding as lawsuit stalls revenue

Los Angeles County enacted the Essential Services Restoration Act, known as Measure ER, on October 3 2026, raising the baseline sales tax from 9.75 percent to 10.25 percent.

The half‑point increase is designed to generate roughly $1 billion in annual revenue to close a funding gap in the county’s health‑care system, which has lost $50 million in federal, state and local support.

Under the measure, 45 percent of the new tax proceeds will be funneled through nonprofit organizations and outpatient clinics that serve underinsured and low‑income residents, while 22 percent is earmarked for LA Health Services, the county’s public health agency. The tax includes a sunset provision that keeps it in effect until October 1 2031.

A lawsuit filed on August 31 by the Libertarian Party of Los Angeles County alleges that Measure ER and the supporting state legislation are unconstitutional, that the tax exceeds state‑imposed limits in several cities, and that the measure’s name misleads voters into thinking the dollars go directly to emergency rooms. Governor Gavin Newsom signed Assembly Bill 1768 the day before the June election, allowing the county to exceed the state ceiling.

“For patients and families across LA County, Measure ER is a desperately needed lifeline,” said Dr. Christina Ghaly, director of LA Health Services. “People do not stop needing care because funding disappears.”

County Chief Executive Officer Joseph Nicchitta wrote that the revenue must remain in an escrow account until the lawsuit is resolved, meaning the anticipated health‑care dollars are frozen. Critics argue the measure was marketed deceptively, while county counsel maintains the tax is lawful. The court’s decision could take two years or longer, and if the measure is invalidated, refunds will be issued to taxpayers.