If all it takes to end homelessness in Los Angeles County is to raise taxes, the California State Legislature is working on it.
ASSEMBLY BILL 1679
Assembly Bill 1679 would allow L.A. County to further exceed the cap on local sales taxes by a half-percent. The bill has passed the Assembly and is being heard today, July 12, in the Senate Governance and Finance Committee.
California State law limits sales tax to 2% over the state’s 7.25% sales tax. According to that law, sales tax in L.A. County should be 9.25%. Sales tax here is 10.25%, because prior special state laws allowed it. That included Measure H, a quarter-percent sales tax, which passed in 2017.
The proposed AB 1679 would add half percent sales tax, which would be used to fund homelessness services and housing. A half a percent added to the current figure, would be 10.75% sales tax.
Constituents are told that Measure H will expire in 2027 and that AB 1679 would replace it. It is unclear whether the new tax would stay at 10.75% until Measure H expired in four years, or if it would immediately be 10.50%.
The bill states that the “Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique circumstances facing the County of Los Angeles with regard to homelessness and affordable housing.”
Currently, the state of California has the highest sales tax (7.25%) in the country. Oregon, New Hampshire, Montana, Delaware and Alaska have no sales tax, according to a February 2023 story in Money (“Here’s Where People Pay the Highest and Lowest Sales Tax in America”).
Sales tax is known as a regressive tax, because it disproportionately burdens lower-income earners “Sales taxes are levied on what people buy, as opposed to what they earn,” according to an Economic Policy Institute report. “Since poor and middle-income families have to spend more of what they earn just to get by, they are paying a greater share of their income in sales taxes.”
According to Intuit Turbotax, some of the highest combined state and local taxes are found in: Chicago, Illinois, and Long Beach [and Los Angeles], California (10.25%), Birmingham and Montgomery, Alabama and Baton Rouge and New Orleans, Louisiana, (10 %) and Seattle and Tacoma, Washington (9.6 %).
ASSEMBLY BILL 1607
Also being heard today in the Senate Governance and Finance Committee is AB 1607, which would allow the Los Angeles County Affordable Housing Solutions Agency (LACAHSA) to place tax increases on the ballot to fund homelessness programs.
That agency, LACAHSA, was created in 2022 by Senate Bill 679 to put tax increases on the ballot for renter protections. At that time SB 679 was excluded from funding homeless programs.
AB 1607 would remove that restriction from SB 679 and the money could be used for homeless programs.
If AB 1679 and AB 1607 are passed, it means L.A. County voters would vote on tax increases in 2024.
The Daily News wrote on July 12 (“Throwing Good Money after a Lot of Bad”) that “instead of addressing the waste and failures of costly homelessness policies, Sacramento is asking for more tax increases. This would be a good time to call your representatives.”
Pacific Palisades is represented by Senator Ben Allen (SD24.senat.ca.gov) and Assemblymember Jacqui Irwin (a42.asmdc.org).
15 billion spent the past few years and the situation has only gotten worse. The approach needs to change.
Brilliant. By almost any measure we are already among the most taxed populace in the country. And now we want to go higher. Some number of people will leave the state as a result, leaving fewer earners to pay higher and higher taxes as we circle the drain. Our homeless problem is not a revenue problem and will not be solved by raising taxes. The billions already thrown at the problem with continuously worsening results should be evidence enough. And yet CA voters will continue to support the same corrupt politicians and policies.