Mayor vetoes alcohol fee, but fight likely to continue

A fee that would be tacked on to alcohol sales was killed by Mayor Gavin Newsom on Tuesday, a few hours after the Board of Supervisors voted to make it law.

Newsom submitted a letter officially vetoing the legislation, which would have forced alcohol wholesalers and others who sell or distribute alcoholic beverages in San Francisco to pay about 3 cents for a beer and 4 or 5 cents for a glass of wine or hard liquor sold in The City.

It was no surprise that Newsom — a Democrat running for California lieutenant governor — vetoed the legislation. The mayor has continuously said he wouldn’t support new taxes or fees at a time when San Francisco is facing a 10 percent unemployment rate.

“I cannot support this unnecessary and harmful new fee that will hurt our city’s economy and cost us jobs at a time when we most need them,” Newsom said in his letter to the board.

On Tuesday, supervisors voted 6-3 in favor of the alcohol fee, which would have generated $15 million to help pay for treatment of San Francisco’s chronic drunks.

Opponents of the fee worked hard to campaign against it, saying the costs would be passed on to restaurants, bars and hotels, and ultimately consumers, thus hurting business.

Supervisor John Avalos, who spearheaded the legislation, said he was fully expecting the mayor’s veto, although maybe not so soon after it was approved.

Avalos said the alcohol industry ran a solid campaign, drumming up opposition in every corner of The City.

“They were successful in scaring the bejesus out of my colleagues,” Avalos said.

Though Newsom takes no part in the operations of the businesses, he is president of Airelle Wines and a partner in Villa Encinal Partners, the companies behind PlumpJack and Cade wineries in Napa Valley. He has invested more than $1 million in each enterprise and receives at least $200,000 in income combined from the wineries each year, according to his latest financial filings.

Ethics and political regulators have said they don’t feel there’s a conflict with Newsom’s veto because the law also affects a large number of businesses.

The veto won’t be the end. Avalos said San Francisco is grappling with another multimillion-dollar budget deficit next year, with the same burdens of paying for alcohol abuse citywide.

“I’m considering putting it on the next November ballot,” Avalos said. “We need to find ways to recover funding for the costs that are inevitable due to overconsumption of alcohol.”

esherbert@sfexaminer.com

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