LA Approves New Revenue Taxes
Los Angeles Voters Approve New Measures to Boost City Revenue, Targeting Cannabis and Hotel Taxes
Los Angeles voters approved two of three tax measures on the June 2, 2026, primary ballot. Measure CB, which applies existing cannabis taxes to unlicensed shops, passed with a commanding 70.72% of the vote. Measure TC, which closes a loophole for online travel companies, also passed. But Measure TT — a hotel tax hike — fell short, earning just 44.83%, according to Daily Breeze.
All three measures targeted the city's General Fund, which pays for 911 response, street repairs, parks, and transportation. The votes came as Los Angeles faces a growing budget crisis tied to federal funding cuts and the looming costs of the 2028 Olympics, Daily News reported.
Measure CB Wins Big by Taxing Illegal Weed Shops
Measure CB passed with more than 70% support — the strongest result of the three. It extends the city's existing cannabis tax to unlicensed dispensaries, which currently pay nothing. Licensed shops pay up to 10% in taxes. Supporters called it a fairness fix. The measure is modeled on what researchers call the "Al Capone theory" — using tax law to crack down on businesses that are hard to shut down otherwise, Daily Breeze reported.
But critics warned it may be unenforceable. Cannabis policy expert Hirsh Jain of Ananda Strategy argued that if a shop is operating illegally, the city should be closing it — not "sending them a tax bill." The city's own administrative office estimates enforcement could cost up to $10.5 million per year. If it works, CB is expected to bring in $30 million to $35 million annually.
Measure TC Closes a Long-Standing Online Booking Loophole
Measure TC also passed with a simple majority. It updates how the city collects hotel occupancy taxes from online travel companies like Expedia and Priceline. Under the old rules, those platforms paid tax only on the wholesale room rate — not the full price customers actually paid. TC closes that gap and is expected to bring in around $5 million per year for the General Fund, Daily News reported.
Hotel Tax Hike Fails as Voters Reject Measure TT
Measure TT was the most divisive of the three. It would have raised the city's hotel occupancy tax from 14% to 16% through 2028. Councilmember Tim McOsker, a leading proponent, argued that tourists — not residents — should help pay for Olympic infrastructure. But the measure fell flat, receiving just 44.83% of the vote, Daily Breeze reported.
Opponents said the hike would have made Los Angeles one of the most expensive cities in the nation for hotel stays. Councilmember John Lee warned it would "push visitors outside the City of Los Angeles limits" and send tourism dollars to nearby cities like Burbank and Santa Monica. The defeat leaves a projected revenue gap of $22 million to $44 million that the city had counted on for Olympic preparations and street repairs.
What the Results Mean for LA's Budget Going Forward
The two approved measures will send new revenue directly into the General Fund. Residents should expect those dollars to go toward faster 911 response times, sidewalk repairs, and park maintenance, according to the Los Angeles City Clerk. But the failure of Measure TT leaves a notable hole in the city's financial plan ahead of the 2027 Super Bowl and 2028 Olympics.
The city is also dealing with cuts from the federal "One Big Beautiful Bill Act," which slashed nearly $1 trillion from healthcare spending, including Medicaid. That has put added pressure on local budgets. With TT defeated, city leaders will need to find another way to fill the gap before the Olympic spotlight hits Los Angeles, Daily News reported.
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