Alcohol fee considered in San Francisco

The San Francisco Board of Supervisors is considering a fee on the sale of alcohol designed to help cover what the city said is a growing cost of addressing health and criminal justice problems associated with drinking.

The proposed fee is opposed by the California Alliance for Hospitality Jobs, a coalition group that includes restaurant and bar operators, beverage companies such as Diageo, hotels and the California Restaurant Association.

If enacted, the “mitigation fee” on alcohol proposed by supervisor John Avalos last week, is believed to be a first for a city government. It would create a fee for wholesalers of 0.076 cents per ounce of alcohol sold, which Avalos estimated would result in a price increase for consumers amounting to about 5 cents per drink.

Avalos estimated the fee would generate about $15 million per year, which would be used to cover unreimbursed expenses such as ambulance transportation for inebriated city residents, hospital and clinic services for alcohol-related diseases for the uninsured and programs to combat alcoholism.

Calling it “a tax in sheep’s clothing,” the California Alliance for Hospitality Jobs contends that the fee would be another nail in the coffin for the city’s struggling hospitality industry, which has been hit hard by the recession.

Matt Klink, a spokesman for the group, said the passed-on cost to consumers will likely be more than 5 cents per drink, and that the group was conducting its own analysis of the impact.

“Now is not the time to raise taxes,” said Klink. “Alcohol taxes kill jobs.”

Klink noted that the fee would be unfair to San Francisco residents who already pay taxes for city services. In a sense, those who purchase alcohol would be taxed twice, he said.

The proposal reportedly has the support of the city’s director of the department of public health, Dr. Mitch Katz, as well as alcohol industry watchdog groups such as the Marin Institute.

“San Francisco government agencies cannot continue to subsidize the alcohol industry,” said Bruce Lee Livingston, Marin Institute’s executive director in a statement. “Alcohol consumption costs San Francisco residents tens of millions of dollars in harm every year. It’s time for Big Alcohol, including wholesalers, to pay its fair share. A local alcohol charge-for-harm fee is long overdue.”

Action on the proposal is not expected before late July.

Contact Lisa Jennings at [email protected]