S.F. eyes alcohol tax to recover health costs

Rachel Gordon, Chronicle Staff Writer

Wednesday, June 23, 2010

San Francisco would be the first local government in the state to impose a booze fee intended to recover health care costs associated with alcohol abuse now covered by taxpayers.

The fee, expected to generate more than $15 million a year, would cover such expenses as ambulance transport to the emergency room for public inebriates, unreimbursed hospital and clinic services for alcohol-related accidents and diseases, and Department of Public Health-funded programs aimed at preventing and treating alcoholism.

The idea, said Supervisor John Avalos, who proposed the fee legislation Tuesday, is to make the targeted businesses pay "for the harm of alcohol consumption on the people of San Francisco and the city and county of San Francisco."

The fee is focused on wholesalers. The rate would be 0.076 cents per ounce of alcohol sold. Avalos estimated that the added cost to a standard drink would be a little less than a nickel.

A similar statewide bill was killed this year in the Legislature amid opposition from the alcoholic beverage industry.

Eric Potashner, a spokesman for California Beer and Beverage Distributors, said the Avalos legislation was still being analyzed by the trade group, "but it would be safe to say they're opposed to it."

Mayor Gavin Newsom has not taken a position on the proposal, said his spokesman, Tony Winnicker. But, he noted, "It's the kind of fee that would impact every hotel, restaurant, retailer and hundreds of thousands of people and would require careful scrutiny and public outreach" to uncover any potential unintended consequences.

The mayor's health director, however, backs the proposal.

"We support it," said Dr. Mitch Katz, director of the Department of Public Health. "Alcohol has a tremendous cost on the health care system. It seems to me that a fee should be added to the cost of alcohol."

On Avalos' behalf, the city controller's office commissioned an independent study that looked at how much money the cash-strapped city spends on unreimbursed alcohol-related expenses. Among those identified: The Fire Department spends nearly $4 million for emergency medical response; San Francisco General Hospital spends $1.8 million caring for patients; and the city's community substance abuse treatment program spends another $10 million.

The money also would be used to cover the costs of fee collection, investigation and enforcement.

Fees, which unlike taxes do not have to go before voters for approval, are tied to cost recovery.

Avalos hopes the fee would be enacted effective in January. Litigation is expected if it is adopted.

E-mail Rachel Gordon at rgordo@sfchronicle.com.

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