Los Angeles County to raise sales tax on April 1st to solve homeless crisis

Los Angeles County voters approved Measure A in the 2024 election with a 57.78% support rate, and it came into effect this Tuesday, April 1st. The measure imposes a 0.5% sales tax to maintain existing homeless services programs and secure additional funding to address the homeless crisis.

Cities like Lancaster and Palmdale will see the largest increase in tax rates, rising from 10.25% to 11.25%. These cities approved an additional 0.75% tax rate on top of the county-wide tax increase. Compton, Lynwood, and South Gate are among the cities with the second-largest tax rate hike, going from 10.25% to 10.75%.

The newly effective Measure A, officially titled the “Homelessness Services and Affordable Housing Ordinance,” is expected to generate over $1 billion in tax revenue annually. Unless voters decide otherwise in the future, this measure is permanent and replaces Measure H, approved by voters in 2017, which used a 0.25% sales tax to address homelessness for a period of 10 years.

Measure A mandates the establishment of targets every five years and tracking progress, including metrics like the increase in homeless individuals moving from tent encampments to permanent housing, reduction in homeless with mental health or substance abuse issues, and the increase in affordable housing units to prevent and alleviate homelessness.

Approximately 60% of the $1 billion revenue will be allocated towards homeless services, with 15% distributed to each city based on their homeless population annually. Another 36% will support the LA County Affordable Housing Solutions Agency, established by state legislation in 2023 to oversee homeless issue resolutions.

The County Board of Supervisors is expected to vote on a proposal at the next meeting to decide whether to grant control over funding to the Los Angeles Homeless Services Authority (LAHSA). LAHSA, formed in 1993, has a 10-member board, with 5 appointed by the County Board and 5 by the Los Angeles Mayor, overseeing funding for all county cities except Long Beach, Pasadena, and Glendale. The agency has faced reports of fund mismanagement and poor governance.

Previously, the city of Los Angeles approved a measure calling for research to potentially bypass LAHSA and contract directly with homeless service providers.

The background of Measure A lies in the long-standing homeless crisis in LA County, far exceeding the severity in other California regions. According to a November report from the county government website, there are 75,518 homeless individuals each night, turning the streets into a “waiting room with no exit” due to lack of affordable housing and services.

Of the homeless population, 75% are completely unsheltered, residing in tents, vehicles, camps, or makeshift shelters in public places like streets, parks, and beaches. Homeless deaths are on the rise, primarily due to drug overdoses; 39% of Los Angeles County jail inmates have mental health issues, with 27% being homeless. Notably, over 550,000 rental households in the county spend more than half their income on rent.

Last Tuesday, the Board of Supervisors unanimously approved a nearly $908 million homeless services funding plan, including an initial allocation of $656 million from Measure A, $209 million from Measure H, and $42.6 million from state government funds.

The board also approved a new formula to distribute Measure A funds among 88 cities. LAist reported that Supervisor Janice Hahn of the 4th district said, “Measure A represents a significant shift in our county’s strategy to address homelessness. No longer is the County government deciding where and how every dollar is spent, but instead, cities will receive their own allocations for housing, outreach, services, and affordable housing.”

A new target approved by the board aims to reduce the number of homeless individuals living in tents, makeshift shelters, and vehicles on the streets by 30% in the next five years, with an expected 5% to 10% decrease in homeless numbers this year.

Due to anticipated deficits and increasing costs of homeless services, the board approved a significant reduction in the proposed $62 million budget cut, including cuts to programs like the RISE job training initiative by $6.6 million, the “Legal Clinic” program assisting homeless individuals with criminal records by $2 million, landlord cooperation for housing homeless by $5 million, and the elimination of a project providing showers for homeless at six locations.

The newly approved budget introduces and expands several programs, some authorized by Measure A, including the Local Solutions Fund distributing $96.4 million of Measure A funds to cities and unincorporated areas, a $5 million program annually aiding approximately 700 seniors with direct housing assistance, and $2.8 million allocated to the LA County Emergency Housing Response Center.

The board also approved a $160 million “A Pathway Home” campground cleanup program for 2025-26. In the past two budget years, nearly $166 million was spent on clearing 39 campgrounds, providing shelter for 1,200 homeless individuals, demolishing 700 vehicles, and providing permanent housing for 235 people.

The newly established LA County Affordable Housing Solutions Agency will receive 36% of the anticipated $1 billion revenue from Measure A to develop affordable housing and maintain existing affordable units. The agency will seek board approval for its budget by July 1st.