Alcohol fee on thin ice pending mayor’s veto

San Francisco became the first city in the nation Tuesday to approve an alcohol fee to offset costs of treating alcoholics, but Mayor Gavin Newsom said he will veto the bill.

The approval came amid heavy opposition from business advocates and the alcohol industry, which said the fee — which breaks down to about 3 cents for a beer and 4 or 5 cents for a glass of wine or hard liquor — would harm the local economy.

The Board of Supervisors voted 7-3 to approve the legislation. The vote tally shows the board is one vote shy of being able to reject a veto from the mayor, which takes eight votes. Supervisors Sean Elsbernd, Carmen Chu and Bevan Dufty voted against the fee. Supervisor Michela Alioto-Pier recused herself, citing a conflict as an owner of an alcohol wholesaler permit.

The fee would generate about $15 million a year and pay for about 90 percent of the costs incurred by The City in dealing with alcoholics, from ambulance rides to substance abuse treatment. Wholesalers would be charged the fee, but it is expected to be passed on to the consumer.

“[Wholesalers] should have the responsibility for paying for some of the impacts of alcohol in San Francisco,” said Supervisor John Avalos, who introduced the legislation.

The fee proposal comes as The City has had to close a deficit in excess of $400 million and faces challenging budget years ahead.

“We can’t even keep the programs that we have going,” Supervisor Chris Daly said. “We can’t pass a tax to save our lives — we’ll see if we will have better luck this November — but we are left looking at fees.”

Doubt about whether the fee could withstand a legal challenge was raised Tuesday. Elsbernd said that not only would The City end up spending more than $1 million in legal fees, but it would likely lose. He also said, “I have a real problem with the notion that the vast majority of the people paying this fee aren’t going to be receiving the services.”

It appears that the fee will never be implemented since Newsom has enough support on the board to be able to veto it.

“Pursuing a new and likely illegal new fee in this economic environment will impact thousands of businesses, cost jobs and put San Francisco at a competitive disadvantage with every other county in California,” Newsom spokesman Tony Winnicker said. “The mayor intends to veto this job-killing and unnecessary new fee.”

jsabatini@sfexaminer.com

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