City Hall’s drive to raise revenue is hurting small businesses, according to a report released today by Public Advocate Bill de Blasio. The report shows City revenue from fines has nearly doubled from $467 million in 2002 to $793 million in 2011—with inspectors too often aggressively issuing fines for little-known regulations that have no bearing on health and safety. To prevent job losses and spur small business growth, de Blasio is calling on Mayor Bloomberg to end the City’s revenue-driven approach to enforcement, starting with this year’s Executive Budget. De Blasio has put forward a five-point plan to emphasize compliance over revenue, reduce red tape and ensure small businesses have input on future regulations and budgets.

“We cannot hold small businesses hostage to the City’s budget,” said Public Advocate Bill de Blasio. “It’s time to stop treating small businesses like an ATM and take an honest look at what the fines are really costing the city. We can protect New Yorkers without running neighborhood businesses into the ground.”

“Mismanaged regulatory practices, as we saw with the City’s restaurant health inspections, can be devastating to our private sector,” said Council Member Diana Reyna, Chair of the City Council’s Small Business Committee. “The City must ensure that it does its job efficiently, consistently, and without undue burden to small business. Public Advocate de Blasio’s five-point policy release accurately identifies several key issues that need to be addressed now: the emphasis during inspections on education instead of penalization and the access businesses have to contest violations.”

De Blasio’s report was prompted by calls to his Small Business Hotline like those from merchants on Newkirk Plaza in Ditmas Park. They recently reported that a Consumer Affairs inspector was blanketing their commercial strip in fines for non-critical violations, including:

• $625 at a 100-year old barbershop for using an antique cash register and specifying different prices for men’s and women’s haircuts;
• $500 for a pharmacy that mistakenly charged 14 cents sales tax on “medicated” Chap Stick

The Public Advocate encountered identical accounts at recent round tables with business owners in Throggs Neck, Bushwick, Brighton Beach and Central Brooklyn. De Blasio is calling for an overhaul of the City’s enforcement approach with a five-point plan:

1.) Pilot a program to cut fines by 10%. Develop a pilot project in one community district per borough to increase compliance through education rather than the immediate issuance of fines.

2.) Open up the books on fine-based revenue.The Public Advocate is requesting a full break-down of agency revenue from fines by type of violation, neighborhood and business sector. De Blasio will introduce legislation requiring annual reporting to the Public Advocate and City Council

3.) Eliminate outdated and over-enforced regulations. De Blasio will support Council Member James Oddo’s legislation to create a permanent Regulatory Review Panel to eliminate outdated rules used solely to generate revenue. To improve on models used in the past, the new Panel should include small business owners.

4.) Streamline the appeals process. Enable small business owners to avoid a trip to Lower Manhattan—and the need to close shop for a day—by allowing them to contest all violations online, by phone or by mail.

5.) Meet business owners on their own doorsteps.De Blasio will appoint a team of 25 Red Tape Cutters made up of retired business owners and community leaders. The team will alert the Public Advocate to enforcement trends and assist businesses with navigating City bureaucracy.

Read the report: www.advocate.nyc.gov/smallbusiness

“Small businesses are the backbone of our economy,” said Council Member Mathieu Eugene. “As a city, we should be doing everything we can to address their needs and reduce the burdens they face. At this difficult time in our economy, it is unfair to target small businesses with excessive violations and fines when they have made so many contributions to our communities. I am proud to support the merchants of Newkirk Plaza and small business owners throughout New York City.”

“The Bronx Chamber of Commerce welcomes the recommendations of Public Advocate Bill de Blasio,” said John Bonizio, Chairman of the Bronx Chamber of Commerce. “Having met with Mr. de Blasio in round table discussions, and in follow-up sessions with his staff, Chamber members have been clear in their call for temperance from City regulations that strangle business growth and inhibit job creation. Mr. de Blasio’s call to rein in the abuses of City policies that forego governance in favor of fine-generated revenue for the City’s budget is a positive first step in a long awaited public advocacy for businesses across New York.”

“I am extremely proud of the Pilot Program our Public Advocate is introducing,” said Aisha Hernandez, President of the Bronx Hispanic Chamber of Commerce. “Oversight at a local level is very important for education and compliance, and as a business owner for over 25 years dealing with regulatory compliance procedures, I know this program will have a real impact. It’s time for the City to speak to the issues affecting small business owners, including unfair fines that are taking away their peace of mind.”

“I am very pleased that the Public Advocate is undertaking this initiative to help small businesses,” said Assembly Member William Scarborough. “These businesses are the engine of our economy and many of the penalties and fines imposed upon them by city government are a clear obstacle to their ability to do business.”

“Immigrant entrepreneurs are the life blood of many communities across the city and harsh enforcement of non-critical violations are creating unnecessary obstacles to small business success,” said Cynthee Cortes, organizer for Small Business United, a project of Make The Road NY. “We’re excited that the Public Advocate Bill De Blasio is taking an interest in standing up for the city’s small business owners. We look forward to working with the Public Advocate and the City to find solutions that will protect consumers and small businesses.”

“The small business community appreciates anything our elected representatives can do to make operating in New York City even the slightest bit easier,” said Tom Gray, Executive Director of the Greenwich Village-Chelsea Chamber of Commerce. “Educating owners before fining them for minor infractions and streamlining the adjudication process are two reforms that make sense. By easing these burdens on small businesses, you not only help ensure their doors stay open, maintaining current jobs, you help create new jobs because these businesses are able grow.”

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