San Francisco Supervisor John Avalos (District 11) announced on Wednesday the City’s intent to pursue a job-killing alcohol “mitigation fee” to fund a grab-bag of health and criminal justice costs at the expense of San Francisco’s hospitality industry.

With this fee, Supervisors hope to recoup approximately $17 million in alleged recovery costs to offset the City and County’s alcohol-related spending. A non-publicly disclosed nexus study attempting to demonstrate the connection between a range of municipal costs and alcohol sales in San Francisco is referenced within the legislation. As of presstime, the study has not been released for further scrutiny.

“Waiters, bartenders, servers and employees, will bear the brunt of this proposal,” said Jon Gasparini owner of 15 Romolo, Rosewood and Rye Restaurants in San Francisco.

The proposed alcohol fee would be imposed at the point of wholesale, which would then be passed on to restaurants, bars, and hotels and ultimately, to consumers. These higher costs will lead to reduced sales, which will ultimately result in reduced wages and health care benefits, job cuts and higher prices for consumers.

The City and County of San Francisco Board of Supervisors have already shown their lack of support for the biggest industry in town by voting to support state legislation to tax alcoholic beverages (AB 1019). This new fee would be in addition to tax increases proposed at the state level.

Advocating for a City-level alcohol fee, on top of additional state alcohol fees, will hurt small business owners, hospitality workers and consumers in San Francisco. A high percentage of hospitality jobs in San Francisco are held by women, minorities, and people without a college education – a group already negatively impacted by the bad economy and local jobs drying up. Restaurants, hotels and bars and their employees have been among the hardest hit by the economic crisis and simply cannot afford to absorb the huge costs brought on by new drink fees.

The proposed “fee” is actually a tax in sheep’s clothing, allowing the Supervisors to circumvent voter approval of an additional tax on alcohol, and instead only secure the approval of their fellow Board members by labeling it as a “fee.” If enacted, this fee would be another nail in the coffin of San Francisco’s already struggling hospitality industry. A survey of San Francisco’s restaurants shows that most San Francisco restaurants already reduced employee hours in 2009 and eliminated employee positions. (Golden Gate Restaurant Association [GGRA] 2009).

“The way to fund social and education programs is through vibrant local economy – not through new taxes that will hurt local employers and cost jobs,” concluded Gasparini.

About CAHJ

The California Alliance for Hospitality Jobs (CAHJ) is a coalition of employers, suppliers, restaurateurs, business owners, trade associations and citizens who work in and with the hospitality industry and are concerned about proposals at the federal, state and local levels to raise alcohol taxes and fees. The alliance is supported by Diageo.