Testimony Before the Committee on Small Business & the Committee on Governmental Operations of the New York City Council

By Victor Wong, Director, Business Outreach

Good morning/afternoon. My name is Victor Wong and I am the Director of Business Outreach at the Partnership for New York City. Over the past six months, we have been working to develop GoBizNYC, a coalition of small business groups representing over 25,000 small businesses across the five boroughs—that’s more than one in ten of all our city’s small businesses. Our supporters include prominent small business leaders as well as chambers of commerce, local development corporations, industry associations, and community-based organizations.

I have met with many small business owners in my outreach efforts and their biggest complaint by far has been the high level of fines. New York City’s punitive regulatory environment adds to the already high cost of doing business here and makes many of these entrepreneurs feel unwelcome despite their significant contribution to the city’s communities and local economy.

Of the city’s 220,000 businesses, nearly 89%, or 200,000, have fewer than 20 employees. Furthermore, half of the owners of these small businesses are immigrants, meaning many of them are relatively recent arrivals, do not necessarily speak English, and are unfamiliar with the city’s complex regulatory environment. All of the business owners I have met have expressed their eagerness to fully comply with the law. After all, given that many of them operate on razor-thin margins, they need to keep business costs low and want to avoid unexpected fines.

However, unexpected fines are exactly what many small business owners are getting. The current policy seems to expect these entrepreneurs to already know and comply with the hundreds of regulations that apply to their particular businesses. As a result, many small business owners are given expensive fines for violating obscure laws. This has built up a substantial amount of friction between the city and the small business community. That’s why many small business owners feel the city is more interested in raising fine revenue in the short-term instead of working with them to ensure that their businesses survive, thrive, and remain a reliable source of tax revenue in the long-term.

The proposed local law is an important first step toward ensuring that the city shifts to a policy of education and compliance by giving small business owners the opportunity to learn about and then correct certain first-time, minor, non-health violations before being penalized. We support the proposed law, which will begin to reduce friction between the city and the small business community. In fact, the analysis that preceded this proposal incorporated the feedback of many small business groups and leaders from our GoBizNYC network. We encourage this type of engagement and hope that the city will continue to be more open and responsive to the needs of its small business owners.

Of course, more remains to be done to support New York City’s small businesses and make it easier for them to navigate and comply with city regulations. We propose that the Council consider establishing a working group to do a regular analysis of which violations deserve a cure period and also which regulations could be consolidated or even eliminated.  The inspection process needs to be more open and transparent so that when business owners receive a notice of violation, they understand exactly what they have done incorrectly and how to correct it. It is also important to ensure that the information about the regulations they need to comply with is easily accessible and comprehensible.

These are just a few of the many ways to make the city more small business friendly. Small businesses will always be an important part of the city’s economy and the city needs to do whatever it can to help them make it here. We appreciate the work you are doing on behalf of this community and we look forward to collaborating with you to tackle the challenges that remain. Thank you.

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