Can Los Angeles County “come in and take the sales tax?”
The answer is a simple “no”. Here’s why:
No agency can just “come in and take” or increase a tax without a vote of the city or county’s citizens. It doesn’t matter if it is a sales tax, parcel tax, or utility tax. The law requires that the citizens vote on tax increases. Sales tax supporters use that line as an “emotional smoke screen” to get residents to vote the increase.
The State Legislature sets a limit on the maximum sales tax amount that can be charged within California.That limit is informally called “the cap.” The cap is currently set at 10.25%.
The sales tax rate varies throughout the state. The sales tax rate for many cities, including West Covina, is “under the cap”. West Covina’s sales tax rate is 0.75 percent below the cap which means either West Covina or Los Angeles County could get it—if voters voted for it.
The earliest Los Angeles County could have a measure asking for all or part of West Covina’s 0.75 percent is November 2020.
The tax increase proponents have also used the South Coast Air Quality Management District (AQMD) as an example of a government agency who could “take the sales tax.” There is a bill, SB 732, in Sacramento that would allow the AQMD to add an additional 1% sales tax to whatever the sales tax rate is in the AQMD’s four-county jurisdiction. At the present time, the bill is stalled. West Covina will not "lose" its tax.
The Bottom Line:
The primary push behind the public agency movement for increasing the sales tax rate is public employee salaries and pensions. Elected officials know that pensions and salaries won’t get voters to vote for tax increases so they say the new tax money will improve popular city services such as “public safety” and parks. Some of the money does go to those services but most will go to pay and pension increases.
What Happened in West Covina?
West Covina’s Measure WC is not a typical sales tax increase measure written by a city council. Measure WC was written by the unions to benefit themselves, not residents. Recently the West Covina City Council made the situation worse when they approved contracts for the police and fire that give public safety additional huge raises and a bonus if the city gets an additional $3 and $4 million dollars. The situation gets even worse because the finance staff acknowledge they did not include the increased overtime and pension payments when they calculated how much the new police and fire contracts will cost the city—we taxpayers. When the real costs of the raises are factored in IF Measure WC passes, approximately 7 million of the 9.7 million dollars is already committed to police and fire pay and benefits. Very little money is left for the proponents “promised” wish list for residents.
Measure WC is not a good deal for West Covina. If the City Council believes a sales tax increase is needed, they should write a measure for the November 2020 ballot that addresses the pension issue that is a concern to residents. If Los Angeles County and the City of West Covina were to each have a sales tax increase on the November 2020 ballot, we believe West Covina residents would support a city measure over a county measure.
For additional insight into West Covina’s sales tax increase issues, visit the FAQ page on a resident website www.nowctax.com