Sales tax goes up to 9.75%

BURBANK — Los Angeles County shoppers will pay an extra half-cent on their purchases starting today, when the sales tax will jump to nearly 10% as part of an effort to fund regional public transportation developments, including new carpool lanes on a local stretch of the Golden State (5) Freeway.

The Measure R sales tax, approved by more than two-thirds of voters in November, is expected to generate $40 billion over 30 years for a series of Metropolitan Transportation Authority rail, bus, highway and road projects throughout the county, but will also add a burden on citizens and businesses during the recession, officials said.

Auto dealers will likely face the largest effect as shoppers feel the weight of a series of recent tax and fee increases, including the sales tax rising from 8.25% to 9.75%, said Glendale City Councilman Ara Najarian, who takes over today as chairman of the MTA’s Board of Directors.

“I think there may be some big-ticket retailers for whom the consumers will receive a significant increase in their total price,” Najarian said. “Those type of retailers may see a drop [in sales].”

The Measure R tax will hit consumer budgets just months after California instituted a 1% sales tax hike and nearly doubled the vehicle license fee, from 0.65% to 1.15% of a car’s value, as part of a plan to balance the state’s budget.

The collective tax and fee hikes will present another hurdle for the 15 dealerships along the Brand Boulevard of Cars in Glendale, many of which have struggled to attract customers during the recession. At least one dealer was mindful of the additional challenge, although he was optimistic that customers would ignore the hike, despite its nearing 10%.

“Of course I’m worried about it,” said Rich Smith, chief financial officer for Ellis Family Stores, which owns Glendale Dodge on Brand. “Do I think it’ll impact business? I really don’t because it’s not something that we really have a choice to pay or not to pay.”

But the overall effect of the series of hikes might be financially damaging for residents, even in light of the potential benefits of public transportation improvements, said former Glendale Mayor Larry Zarian, member of the California Transportation Commission.

The most significant local project will expand the Golden State Freeway to add new carpool lanes between the Ventura (134) Freeway and the Hollywood (170) Freeway.