Metro's ballot measure tax would hit some areas harder than others

Los Angeles County’s transit agency is asking voters to approve a sales tax increase this November to fund new projects, but some areas would be hit harder than others.

Cities like South Gate could match Chicago with the highest sales tax in the country.

If approved by two-thirds of county voters, the Metropolitan Transportation Authority ballot measure would add a half-cent sales tax for 40 years and extend the Measure R half-cent sales tax by 18 years to raise $120 billion.  

The funds would help pay for a long list of transportation projects, including a subway under the Sepulveda Pass, acceleration of the Purple Line subway to Westwood and an extension of the Gold Line to Claremont.

The proposal if adopted would be the fourth sales tax increase in L.A. county since 1980, bringing the base sales tax to 9.25 percent.

But in some cities the increase would be even higher, among them La Mirada, Pico Rivera and South Gate, which have the highest sales tax rates in the county and the state at 10 percent. A half cent hike for these cities would match Chicago's 10.25 percent rate, the highest in the country.

Eight other cities in L.A. county have sales tax rates of 9.5 percent: Avalon, Santa Monica, Culver City, South El Monte, Commerce, San Fernando, Inglewood and El Monte.

The city of Los Angeles charges a 9 percent sales tax.

Of the cities with the highest tax rate, South Gate has the lowest median income at about $43,500, about $10,000 less than the median income for L.A. county.

Blanca Almendares, a South Gate resident, showed us her receipt as she was leaving Walmart with her groceries and household items. Her bill: $52.62.

Since there’s no sales levy on food, she paid $3.79 in taxes. With the proposed half-cent added on, she would have paid $3.98 to the government.

Because of South Gate's high sales tax, she and her friends sometimes go to neighboring cities to shop, particularly for more expensive items.

Sales taxes are considered regressive because they burden low-income people more as a percentage of total income.

But according to UCLA professor and author Ethan Elkind, most transit agencies have come to rely on sales tax revenue as the largest share of funding as state and federal money has dried up. Sales tax revenues make up two-thirds of L.A. Metro's funding.

"It’s definitely not the best way to run the rodeo," said Elkind. "The problem is there aren’t a lot of great sources of funding out there, so this self-help approach is really the best."

A USC-UCLA study in 2008 found using revenues from toll lanes, like the ones on the 110 and 10 freeways, was a more equitable way to fund road improvements than the more politically popular sales tax because it resulted in more wealthy and middle-income people paying, and doing so by choice.

Some transportation experts, like USC professor Marlon Boarnet, have suggested a similar system should be used to pay for transit projects, charging drivers by the mile for the pollution and congestion they cause to offset the cost of transit.

Still, Almendares says she’ll support another tax increase in L.A. County even if it means she'll be paying South Gate's 10.25 percent sales tax. That's because she uses transit.

"I don't drive, so it works out for me," she said.

To look up the sales tax rate in your city, enter an address on this California Board of Equalization website.

Metro is holding public meetings in April to gather public comment on the projects it plans to fund with the proposed increase in sales taxes. Comments can also be left on its website.

Correction: An earlier version of this story projected a tax rate increase of half a percent if the Metro ballot measure passes. Because the current Proposition 30 quarter percent sales tax increase expires at the end of 2016, the net increase in 2017 would be only a quarter percent over the 2016 reate. This change has been reflected in the figures above.