Sales tax hike to cover Newsom’s broken health – Latest News
A coalition of particular pursuits will ask LA County voters to raise the gross sales tax half a p.c subsequent week to make up for Gavin Newsom’s poor planning on health care spending.
LA voters will resolve the destiny of the Essential Services Restoration Act, a half-cent county gross sales tax, on June 2. The tax will supposedly raise $1 billion yearly by way of 2031.
The official pitch is that it’ll make up for federal Medicaid cuts from HR1, President Donald Trump’s “One Big Beautiful Bill.”
Actually, federal spending on Medicaid (generally known as Medi-Cal within the Golden State) has continued to rise after HR1 — simply at a decrease charge.
A coalition of particular pursuits will ask LA County voters to raise the gross sales tax half a p.c subsequent week to make up for Gavin Newsom’s poor planning on health care spending. Anadolu through Getty Images
Governor Newsom’s January price range tasks Medi-Cal spending of $222.4 billion for 2026-27 — up from $196.7 billion in 2025-26, and more than double its pre-COVID degree. Medi-Cal now consumes roughly 20% of California’s General Fund, and more than 40% of complete state spending.
On Newsom’s watch, full-scope Medi-Cal was prolonged to undocumented younger adults in 2020; unlawful aliens aged 50 and older in 2022; and the remaining 26-to-49 cohort on January 1, 2024.
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By 2025 the maths broke. The Newsom administration cited Medi-Cal spending on undocumented immigrants operating $2.7 billion above projections as the explanation for a course correction. New enrollment for undocumented adults was frozen on January 1, 2026, and premiums for present beneficiaries are supposed to start in 2027.
To cut back the speed of spending growth, in Medi-Cal and in different states’ Medicaid packages, the Republican managed Congress made some commonsense reforms.
The One Big Beautiful Bill Act requires twice yearly eligibility checks for all beneficiaries, for instance. It additionally provides a neighborhood engagement requirement beneath which some beneficiaries should work, examine, or volunteer no less than twenty hours per week to stay eligible.
Governor Newsom’s January price range tasks Medi-Cal spending of $222.4 billion for 2026-27 — up from $196.7 billion in 2025-26 Jade Maas/peopleimages.com – stock.adobe.com
Further, HR1 reduces federal help for unlawful alien Medi-Cal advantages, whereas nonetheless partially reimbursing their emergency room visits.
With federal and state officers transferring to curb Medi-Cal’s ballooning prices, L.A.’s healthcare energy gamers are scrambling. Faced with the prospect of fewer {dollars}, they’re pushing a acquainted playbook: cry “crisis,” spook voters, and push by way of a new half-cent gross sales tax to keep the money flowing.
The coalition pushing the gross sales tax, “Restore Healthcare for Angelenos,” is led by St. John’s Community Health.
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In 2011, St. John’s reported $25.7 million in complete income. In 2024, it reported $187.5 million — a 7.3-fold increase. Net property grew from $10.7 million to $93.4 million. In 2024 alone, this safety-net clinic posted web income of $23.5 million — a 12.5% margin — and grew web property by 34% in a single yr.
St. John’s used $4 million of its current income to fund the new advocacy group. It may very well be a good investment — for them: if Angelinos resolve to tax themselves one other half p.c, more unlawful aliens will likely be ready to go to the clinic at taxpayer expense, whereas managers can maintain on to their beneficiant compensation. St. John’s now employs 16 officers incomes over $250,000 every.
Another main donor to the “Yes on ER” marketing campaign is SEIU Local 721, the union representing most of St. John’s workers and roughly 55,000 Los Angeles County staff. Under the measure’s spending method, up to 47% of the income flows to the county Department of Health Services, one other 22% to safeguard public hospitals and clinics, and a couple of.5% to Correctional Health Services — more than 70% of the proceeds funneled to departments staffed by SEIU 721 members.
Freedomz – stock.adobe.com
The union ratified a new county contract in October 2025 that includes money bonuses, cost-of-living changes, and elevated county contributions to employee health care, all of which have to be paid from county income. A billion {dollars} a yr in new general-fund money makes these commitments simpler to honor.
LA County will not be the one one going through an organized push for more gross sales taxes to “save” Medi-Cal. Santa Clara County handed an equivalent gross sales tax final November. Contra Costa County has Measure B on the June poll, utilizing the identical federal-cuts framing.
But in LA County, the new tax can be added to an particularly high gross sales tax burden: the countywide charge would rise from 9.75% to 10.25%, whereas in Palmdale and Lancaster, the new charges can be an eye-watering 11.75%.
Sacramento constructed Medi-Cal into an unsustainable $222 billion enterprise, enriching healthcare suppliers and unions alongside the way in which. Now it’s pulling back.
But fairly than settle for a lowered charge of Medi-Cal spending will increase, these particular pursuits need Los Angeles taxpayers to cover the distinction.
Marc Joffe is a Visiting Fellow at California Policy Center.
