TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Libby Bretthauer, Finance Director
Emy-Rose Hanna, Financial Services Manager
Alexis Motonaga, Budget & Financial Analyst
SUBJECT: Title
Consideration of a Position on Los Angeles County Measure ER, the Essential Services Restoration Act for Los Angeles County, and AB 1768 (Bryan) (No Budget Impact) (Finance Director Bretthauer).
(Estimated Time: 15 Min.)
DISCUSS AND PROVIDE DIRECTION
Body
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RECOMMENDATION:
Staff recommends that the City Council discuss and provide direction on a position of Oppose, Support or Neutral for (1) the Los Angeles County Measure ER and (2) State Assembly Bill 1768 (Bryan). If directed by City Council, Staff will prepare a letter regarding the position and send to the Los Angeles County Board of Supervisors, State Legislature, and others as deemed appropriate.
FISCAL IMPLICATIONS:
There are no fiscal implications associated with the recommended action.
BACKGROUND:
At its meeting on February 10, 2026, the Los Angeles County Board of Supervisors voted to place a 1/2 percent (0.5%) general sales tax measure on the June 2, 2026, Statewide Primary Election ballot, entitled “Essential Services Restoration Act for Los Angeles County” or “Measure ER”. If passed by the voters of Los Angeles County, Measure ER would impose a 0.5% increase to the County sales tax, bumping up the current rate from 9.75% to 10.25%, effective October 1, 2026, for five years ending October 1, 2031. This 0.5% sales tax increase is estimated to generate $1 billion annually to the County.
For context, the California Constitution states that local governments (including counties) may levy either general taxes or special taxes. A two-thirds (66.7%) vote is required to pass a special tax and a simple majority (50%+1) is required to pass a general tax. The state defines a special tax as any tax imposed for specific purposes.
DISCUSSION:
With the passage of Measure MMB in November 2024, the Manhattan Beach sales tax rate is currently at 10.25%.
Statewide Base Rate 6.00%
City Bradley-Burns Rate 1.00%
County Transportation 0.25%
Proposition A (1980) 0.50%
Proposition C (1990) 0.50%
Measure R (2008)* 0.50%
Measure M (2016)* 0.50%
Measure A (2024)* 0.50%
Measure MMB 0.50%
Total 10.25%
*LA County Measures R, M and A are exempt from the statutory cap of 2.00%.
The Statutory District Tax Cap
State law (Revenue and Taxation Code Section 7251.1) establishes a combined rate limitation or "District Tax Cap". This law limits the combined total of all local district taxes in any county to 2.00% above the statewide base rate of 7.25%. However, the California Legislature occasionally grants "carve-outs" for specific tax measures within counties through the passage of legislation to exempt it from the 2.00% District Tax Cap. When a tax is exempted by the State, it does not count toward that 2.00% limit and would instead stack on top of the existing tax rate.
Currently, Propositions A and C, plus the City’s transactions and use tax Measure MMB, count toward the district tax cap, leaving an additional capacity of 0.5%.
Essential Services Restoration Act for Los Angeles County General Sales Tax Measure
Measure Summary: This measure would authorize the County of Los Angeles to levy a transactions and use tax at a rate not to exceed 0.5%, until December 31, 2031, and establish a nine-member advisory citizens’ oversight committee to recommend and review expenditures from the sales tax and provide annual reporting to the public. Los Angeles County proposes that the revenue from the measure would be placed in the County’s general fund and be used for purposes consistent with general fund expenditures. The Los Angeles County Board of Supervisors has adopted a spending plan that allocates Measure ER to support county healthcare services.
Assembly Bill 1768 (Bryan) Transaction and Use Taxes: County Limit
Bill Summary: This bill would authorize the County of Los Angeles to levy a transactions and use tax at a rate not to exceed 0.5%, until December 31, 2031, and exceed the combined rate limitation established by Section 7251.1 (i.e. exempt the measure from the limit).
This exemption would ensure that the County’s new 0.50% tax would not consume any of the City’s remaining 0.50% district tax capacity.
If Measure ER is approved by voters, and Assembly Bill 1768 is passed, the total sales tax rate in Manhattan Beach would increase to 10.75%.
At the April 7, 2026, City Council Meeting, Mayor Pro Tem Franklin requested (and Mayor Lesser concurred) that the Council consider whether to take a position of “Oppose” on the LA County “Measure ER”. At the preference of the Council, the City Manager may be authorized to write a letter stating City Council’s position on Measure ER and AB 1768. The letter would be sent to the Los Angeles County Board of Supervisors and others, as deemed appropriate.
Staff also researched other LA County cities that have taken formal action to support or oppose the County Measure ER. To date, staff confirmed the following cities have taken formal action:
• Beverly Hills - Oppose
• Glendale - Oppose
• La Verne - Oppose
• Long Beach - Support
• Norwalk - Oppose
• Pasadena - Support
• Torrance - Oppose
Additionally, staff conducted a limited search and was able to locate at least two instances in the past where City Council considered taking a position on a County measure.
Staff recommends the City Council discuss and provide direction on a position of Oppose, Support or Neutral for (1) the Los Angeles County Measure ER and (2) State Assembly Bill 1768 (Bryan). Upon direction, staff would facilitate sending letters stating the Council’s position on Measure ER and AB 1768 to the Los Angeles County Board of Supervisors and others, as deemed appropriate.
PUBLIC OUTREACH:
After analysis, Staff determined that public outreach was not required for this issue. However, the City’s Legislative Platform and any official positions taken on legislation are available on the City’s Legislative Positions web page as provided above.
ENVIRONMENTAL REVIEW:
The City Council's consideration of an update regarding the City’s legislative positions is not a “project” as defined under Section 15378 of the State California Environmental Quality Act (CEQA) Guidelines because it does not have a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA, and no environmental review is necessary.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. Measure ER (Essential Services Restoration Act for Los Angeles County) Ordinance
2. AB 1768 (Bryan) Bill Text
3. CDTFA California Sales and Use Tax Rates by County & City