As the budget crisis continues to unfold, the city of San Francisco is faced with finding ever-more-creative ways to bring in revenue.
This month the city tacked on 20 cents to the cost of a pack of cigarettes. The new fee will help supplement the Department of Public Works’s recently cut street cleaning budget.
Already, swimmers, travelers and ambulance riders are among those paying for the more than $117 million in new fees and fee increases this year.
San Francisco brought in an average of $58 million per year through fees between 2005 and 2007. However, in the past two years that number has jumped to $113 million in 2008 and $117 million in 2009.
Because of the state’s inability to raise taxes without a two-thirds majority vote, local municipalities are forced to hunt for extra revenue where they can. “All cities in California have become heavily reliant on fees,” said Greg Wagner, the mayor’s budget director.
Unlike taxes, new fees can be legislated in without voter approval.
Even outside of California, cash-strapped cities have become increasingly creative in finding ways to boost the bottom line. Chicago, for example, recently introduced a vomit fee that would charge intoxicated passengers $50 for becoming ill while riding in a taxi.
For its part, San Francisco started looking into the soda fee after a study from the University of California revealed that the consumption of sugary beverages is a large part of the $41 billion California pays annually for health problems related to obesity.
Wagner said plans are underway to introduce the fee “very soon.”
Of the 67 new fees and fee increases that were proposed over the past two years, fees related to the Municipal Transportation Agency saw the largest increase. The agency has brought in an additional $66 million in the past two years from a number of different fees including parking meters, traffic fines and a Muni fare increase of 50 cents per adult passenger.
Flying got more expensive too. The San Francisco International Airport saw its fees go up by over $28 million in 2008, or 33 percent more than the year prior. It’s unclear how much of this will be passed on to passengers.
Water and sewage fees were also raised by nearly $43 million over the past two years as part of an effort to recoup the $4.6 billion cost from retrofitting and upgrading the city’s water system. The increase cost an average of $53 per San Francisco resident in 2008.
Other increases this year and last include $3.7 million for emergency medical services, $2.3 million for vector control and healthy house inspections, and $180,000 in fee increases at local swimming pools, among many others.
Mission Pool employee Oscar Rosas said they “expect to see as much as a 15-percent drop in patronage because of the increase,” which raised admission from $4 to $5.
The new 20-cent Cigarette Litter Abatement Fee—effective Oct. 1—will bring an additional $5 million to the Department of Public Works this year. After a city audit revealed that cigarette trash accounts for more than 26 percent of all litter found on the street, the city decided to pass the cost on to smokers by raising the price of cigarettes.
By law the city can use revenue collected from fees only to recoup the cost of that service. So city departments routinely conduct cost analysis reports to determine where the city is losing money. The Mayor then takes those figures into account when creating his annual budget, and decides whether to pass that cost on to the public.
It’s unclear what the reaction to the soda fee will be. In the past, San Francisco has been sued for imposing fees on particular products. Such was the case with the plastic bag fee, leading to its eventual ban in 2007.
The Mayor’s office is also looking into implementing congestion pricing–a fee charged to drivers who pass through certain parts of the city during rush hour. A similar fee is already in effect in cities in Asia and Europe and is currently being tested in Seattle, Chicago, Minneapolis, Miami and the Bay Area.
In a recent speech, Mayor Gavin Newsom called congestion pricing “the single greatest step we can take to protect our environment and improve our quality of life.”