Two committees approved legislation this week authorizing Contra Costa and Los Angeles counties to exceed the state’s 2 percent limit on local tax rates, sending the bill (AB 1768, Bryan) to the Assembly floor.
The bill was approved April 27 by the Assembly Revenue and Taxation Committee with a 5-2 vote and cleared the Assembly Local Government Committee with a 6-2 vote April 29.
In both committees, the votes were split down party lines, with Democrats in support and Republicans opposed. In the Local Government Committee, Democratic Assembly Members Blanca Pacheco and Blanca Rubio abstained from voting.
Supporters of the bill argue that it is needed to allow voters in the two counties to approve tax increases to raise revenue and offset losses in federal funding.
CalTax opposes the bill, along with the Howard Jarvis Taxpayers Association, several trade associations, and numerous cities within Los Angeles County.
The League of California Cities’ Los Angeles County Division argued: “Congress’ passage of H.R. 1 has created a national health care crisis that Los Angeles County cannot solve on its own. The L.A. County Division and many local cities are open to working with the County and the State to consider options to restore health care funding cut by H.R. 1, but not with a regressive tax that would disproportionately burden those in our communities who are already struggling to keep up with the rising cost of basic necessities like food, gas, utilities, and housing.”
The group of cities added: “With sales taxes in L.A. County already as high as 11.25 percent in some areas and as low as 7.25 percent in nearby counties, we also fear that prices are reaching a tipping point and are in real danger of pushing businesses and shoppers out of L.A. County. If Sacramento legislators are serious about prioritizing affordability for Californians, then you should reject this proposal to exempt yet another 0.5 percent sales tax hike from the 2 percent sales tax cap.”