A Health Care Tax With No Lockbox: What LA County's Measure ER Really Promises

HEALTH CARE - On October 1, Los Angeles County's sales tax rises from 9.75 percent to 10.25 percent, with groceries and prescriptions exempt. Voters approved Measure ER, the Essential Services Restoration Act, in June by roughly 24,000 votes, and the county expects it to raise about $1 billion a year through 2031 to keep its public health system afloat. Voters were told the money would save the safety net. What they actually approved is a promise, not a lockbox.

The need is real. In February, Public Health ended clinical services at seven clinics, including sites in Inglewood, Pomona, Torrance and Lancaster, after losing more than $50 million in federal, state and local funding. Six remain. Those sites offered vaccinations and testing and treatment for tuberculosis and sexually transmitted infections, services that low-income and uninsured residents depend on.

The larger hole is in the hospital system. The county's 2026-27 budget message estimates a $662.2 million decline in revenue for its public hospitals and health care system, and Health Services plans to use $743.6 million of one-time fund balance to cover the shortfall, a cushion it projects will run out in fiscal year 2028-29. The same letter concedes the county lacks the local resources to replace the lost federal support. County projections cited by LAist put the annual federal loss to its health departments near $800 million.

Set $1 billion beside those numbers and the arithmetic is tighter than the ballot slogan. Add the $4.8 billion the county owes childhood sexual abuse survivors under AB 218, with payments through 2030 and debt service through fiscal 2050-51, and every general fund dollar has several claimants. That matters because Measure ER is a general tax. It needed only a simple majority because the revenue goes into the general fund, where the Board of Supervisors decides each year how much actually reaches hospitals and clinics.

The board did adopt a spending plan: 45 percent for nonprofit clinics serving uninsured residents, 22 percent for county hospitals and clinics, 10 percent for Public Health, and the remainder for Planned Parenthood, school-based care and Medi-Cal outreach. It is a statement of intent, not a legal restriction. The percentages are also set by category, not by site, so they do not tell a resident of Inglewood or Lancaster whether a closed clinic will reopen. Supervisor Holly Mitchell, who introduced the measure, has vowed to see the money spent as promised, and I take her at her word. But a controller does not audit sincerity, and the promise will outlast the promisers: Measure G brings an elected county executive in 2028, years before the tax expires.

Oversight is thinner than the campaign implied. Measure ER creates a nine-member citizens' oversight committee, but it is advisory. Seats go to the directors of Public Health and Health Services, one appointee from each supervisor, and representatives of SEIU 721 and SEIU 2015. The Auditor-Controller will commission an annual independent audit, due to the Board by March 31. An annual audit is a genuine control, and the people on the panel know the system. Still, the departments receiving the money, and the unions representing their employees, sit on the body evaluating how it is spent. An auditor would flag that structure, whatever the good faith of the people inside it.

Nothing here requires another ballot. The Board can adopt four controls this fall.

First, account for it separately. Create a dedicated budget unit so every Measure ER dollar, and its destination, can be traced. The law does not explicitly require it; prudence does.

Second, convert intent into policy. Adopt the spending plan as Board policy requiring a public written finding, and a recorded vote, before any dollar is redirected.

Third, publish a quarterly dashboard showing collections, allocations and actual spending by site, including the status of each of the seven closed clinics.

Fourth, use the appointments. Each supervisor should name at least one credentialed finance professional to the oversight committee, and the Board should respond publicly, in writing, to every annual audit.

Whether the tax was worth its cost is a political argument, and Supervisor Kathryn Barger, the lone dissent when the board placed it on the ballot, made hers. I am making a narrower one. Residents are about to pay roughly $1 billion a year. Before the first dollar arrives, they should be able to see the running total, where it went, and who answers for it. Right now, the answer is a promise.

Jose E. Navarro, MBA, is a financial controller and founder of The Navarro Report, a public finance and government accountability publication based in San Diego, California.