10.25% sales tax?

That's what we're talking about for L.A. County - if Gov. Arnold Schwarzenegger's plan to increase the state sales tax gets through. The governor is proposing a 1.5 percent hike, which could raise more than $10 billion through fiscal 2009-2010. That, combined with the half-cent increase approved by L.A. voters to pay for mass transit, gets you up to 10.25 percent. From the LAT:

Schwarzenegger also proposed extending the sales tax to appliance and furniture repair, vehicle repair, golf fees, veterinarian services, amusement parks and sporting events. He proposed a 9.9% tax on the extraction of oil from California ground, the expansion of sales tax to some services, and a 5-cent-per-drink tax on alcohol. His plan also includes a $12 increase in annual vehicle registration fees.

Republican legislators will be apoplectic; they wouldn't even go for a smaller sales tax increase last summer. There would be cuts too: around $2.5 billion from schools and community colleges, along with the proposed elimination of dental insurance for poor adults on the state's MediCal program, and lower subsidies to the aged, blind and disabled. Coming only two days after Obama's call for sacrifice, this one will be interesting to see play out.


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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
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