Split verdict on California health taxes as cost-of-living anxiety takes its toll

California voters are delivering a split decision on whether they want to pay more sales tax to support healthcare services: Los Angeles County’s measure is clinging to a narrow lead, while Contra Costa County’s went down in defeat, a divide experts attribute to growing anxiety over the cost of living.

In Los Angeles, Measure ER, which proposes a half-cent sales tax for the next five years, led as of Tuesday evening with 50.59% of the vote. The measure requires a simple majority to pass. Supporters estimate that tax, which would not apply to groceries and medications, could generate $1 billion a year. 

The county’s voters historically have been supportive of taxing themselves to fund public initiatives, said Mike Bonin, executive director of the Pat Brown Institute for Public Affairs at California State University, Los Angeles. But Measure ER proved to be a hard sell.

Even among Democrats and progressives, Bonin said, there was weariness over the measure’s regressive nature — meaning sales taxes tend to fall harder on lower-income residents than wealthy ones. “This is tough on people, and so there was some resistance to it, which is why I think it took until (Monday) for it to get over the hump,” Bonin said.

In Contra Costa, Measure B would have levied a five-eights-cent tax generating an estimated $150 million a year. Voters rejected the measure, with 57% of voters opposing as of the latest count.

“We’re in a difficult period for middle-income people,” said Marc Joffe, president of the Contra Costa Taxpayers Association who led the campaign against Measure B. “I think the fact that gasoline went up to $6 during the course of the campaign was probably a wind (at) our back.”

The results stand in contrast to Santa Clara County, where voters last fall approved a sales tax with 57% of the vote.

Why counties turned to voters

Both measures were a response to the federal spending package Congress and President Trump passed last summer. Because of changes to Medicaid, also known as Medi-Cal in California, counties are bracing for a spike in the number of uninsured people. And as people lose coverage but continue to seek care, safety net providers stand to lose significant revenue. In L.A., money from the sales tax would also shore up county public health, Planned Parenthood services and emergency preparedness. 

Coalitions of safety net providers backed the measures, warning that without new revenue, they could be forced to reduce hours, cut staff or close facilities. 

“There’s no way out of this,” Louise McCarthy, chief executive of the Community Clinic Association of Los Angeles County, said on election night. “This is a situation that is being forced upon us. No local decisions made this happen, and no local decisions without revenue can solve the problem we’re in now.” 

New estimates by the UC Berkeley Labor Center project that 2.2 million more Californians will go without health insurance by 2030 because of Trump’s spending law and recent state actions. That would nearly double the state’s uninsured rate to 14.7% and erase much of the state’s progress over the last decade at getting everyone insured. Counties, which operate safety net clinics and hospitals, say the federal policies and funding cuts – and not enough support from the state – are leaving them with major budget holes and in search of new ways to generate revenue. 

Los Angeles County Supervisor Holly Mitchell, who introduced Measure ER, called the sales tax a “last resort,” saying the county had already enacted hiring freezes, limited overtime and tapped emergency reserves. The county estimates it will lose about $2.5 billion over the next three years because of federal cuts. 

The measure was opposed by some cities, anti-tax groups and County Supervisor Kathryn Barger, who represents the region’s sprawling northern exurbs.  Lancaster and Palmdale have nation-leading sales tax rates of 11.25%, and in Contra Costa County, sales taxes in Pinole and El Cerrito in Contra Costa have reached 10.25%. Both counties needed Legislative approval to pursue new sales taxes because their measures exceeded state limits.

The sales tax measures came as half of Californians named cost of living as the top state issue. 

Susan Shelley with the Howard Jarvis Taxpayers Association, which opposed both measures, argued the proposals were misleading. Because backers structured the measures as general sales taxes — meaning counties can legally use the funds at their discretion — rather than earmarked taxes for healthcare, they required only a simple majority, not the two-thirds threshold that a special tax would have demanded.  

For other counties that may consider taking similar measures to voters: “I hope it sends the message that people are taxed enough,” Shelley said. 

Jim Mangia, chief executive of St. John’s Community Health, said the county will use the sales tax revenue as intended: for healthcare.

“This is a temporary solution, and we will not stop fighting for the long-term federal funding Angelenos deserve,” he said.

Counties press state for help

Contra Costa County runs one hospital and 11 clinics. Proponents of the measure estimated it would face at least a $1 billion deficit over five years because of funding losses, though  opponents disputed those figures. 

County Supervisor John Gioia said revenue from the tax would have protected critical services and helped keep people insured. Under Trump’s budget bill counties will soon have to check people’s eligibility for Medicaid every six months rather than once a year, and adults without children will face new work reporting requirements.

Gioia said the tax could have funded additional eligibility workers and bolstered the county’s program that provides basic health services to people with no insurance options.

Los Angeles and Contra Costa looked to Santa Clara County as a model. Voters there approved a similar measure last November; it took effect in April, and county officials anticipate it will make roughly $337 million a year. The county is allocating those dollars toward emergency services, cardiac care, mental health services and maternity care, among other areas.

But even that revenue only covers a third of Santa Clara’s projected shortfall, said County Executive James R. Williams. The county is still cutting and reorganizing staff and services in order to balance its budget. 

“We were very clear, right from the outset, when we put this emergency measure on the ballot, that we were staring down over a billion dollars a year in revenue losses as a direct result of” federal spending cuts, Williams said. The missing link, he said, “is that the state has to do its part.” 

The California State Association of Counties estimates federal cuts will cost the 58 counties up to $9.5 billion –  a cost local officials say they can’t foot alone. The association has been pushing for additional state funding for months without much success. Gov. Gavin Newsom and legislators must finalize the 2026-27 budget by next week.

“For most California counties, raising local taxes to absorb the impacts of (federal cuts) is not feasible,” said Graham Knaus, chief executive of the association. “And the fact that counties are even being forced to contemplate it is unacceptable.” 

Kristen Hwang contributed to this report.

Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a price they can afford. Visit www.chcf.org to learn more.