San Francisco Alcohol Mitigation Fee Michele Simon, JD, MPH - - PowerPoint PPT Presentation

San Francisco Alcohol Mitigation Fee

Michele Simon, JD, MPH Research and Policy Director Marin Institute Small Business Commission Meeting July 12, 2010

Who is Marin Institute?

• National leader in alcohol policy since 1987
• Mission to reduce alcohol harm in communities
• Monitor alcohol industry marketing and lobbying tactics
• Science-based approach to policy
• Pricing is the most influential factor in alcohol

consumption

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Cost of Alcohol Use in San Francisco

• Two-thirds of San Francisco adults are drinkers;

this is higher than the national rate of 55%

• Alcohol is a significant cause of premature death
• f both men and women in San Francisco
• San Francisco government bears $17.7

million in unreimbursed alcohol-related costs This is an under-estimate due to conservative assumptions; also crime costs were excluded

Cost of Alcohol Use in San Francisco

• Department of Public Health
• Treatment and Prevention Cervices
• San Francisco General Hospital Services
• Sobering Center
• Fire Department
• Emergency Medical Services transportation

San Francisco Alcohol Mitigation Fee

The ordinance:

• is designed to reimburse the city for alcohol harm costs
• imposes a $.076/oz of ethanol (roughly 5 cents per

drink) on alcohol wholesalers and manufacturers selling direct to consumers

• says fee may only be used for unreimbursed alcohol-

related costs to City and program administrative costs

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Myth: The fee is a hidden tax

Reality: Under well established law in California, governments can impose a fee on business Must show:

• reasonable relationship between the source of

the fees and how the money will be used.

• Sinclair Paint Co. v. State Board of Equalization, 1997

Myth: The alcohol fee penalizes everyone for “irresponsible drinkers”

• All drinking has a cost
• Should not blame victim for addiction
• Most alcohol problems are not caused by

alcoholism or addiction per se

• Even moderate drinking causes chronic

illnesses such as cancer

• Right now, everyone is paying for problems

Myth: The fee is going after small businesses Reality:

The ordinance imposes the fee on alcohol wholesalers, not retailers, bars, restaurants, hotels, or anyone in the hospitality industry

Caveat: Those selling directly to consumers such as brew pubs will have to pay the fee.

Whether fee is passed on is up to wholesalers

Myth: The fee will result in massive job losses, and retailers and bars will go out of business

Reality:

• There are no published studies demonstrating loss of

business or jobs due to an alcohol tax or fee

• Nickel a drink unlikely to have much impact
• Research shows businesses adequately compensate for

any volume loss with higher prices. In fact, many businesses make money when taxes/fees are increased.

Myth: Fee will cause consumers to purchase alcohol outside of San Francisco

Reality: Residents: Cost of leaving the city (gas, bridge, BART) far exceeds additional 5 cents/drink Others: Tourists? Doubtful. Residents of East Bay, North Bay? Bridge tolls larger factor Other cities/counties may also impose similar fees once SF model is established

Myth: The fee opens the door to unchecked increases for new DPH programs

• DPH cannot just create new programs
• Fees must be related to alcohol harm and

can only cover unreimbursed costs

• Fees collected may not exceed $17.7 million

identified by the nexus study

• After 5 years, Controller’s office is required to

update the nexus study

San Francisco Alcohol Mitigation Fee

• This modest fee will help San Francisco

recoup some of the enormous cost of harm caused by alcohol consumption

• Currently, all residents and businesses are

paying the costs through taxes and loss of business from unchecked alcohol problems

• Don’t listen to alcohol industry scare tactics
• Alcohol fee is reasonable and long overdue

Marin Institute’s Ultimate Goal

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To put ourselves out of business, not you

Questions? Michele Simon, JD, MPH Research and Policy Director Marin Institute (415) 257-2485 (direct) MicheleS@MarinInstitute.org