2016-04-13 / Features

City’s Small Businesses Fight Red Tape With Commission


About two-thirds of small businesses survive at least two years and about half survive at least five years, according to the U.S. Bureau of Labor Statistics. In New York City small businesses make up 95 percent of all businesses and employ almost one million workers.

“New York’s small businesses are the driving force of our economy,” said Jessica Lapin, President of the Alliance for Downtown New York, in a March 29 press release by City Comptroller Scott Stringer.

In January 2015, Comptroller Stringer launched the Red Tape Commission to find ways to improve conditions for small businesses and the Queens Chamber of Commerce enthusiastically agreed to participate as one of 31 members representing business owners, advocates and regulatory experts from the five boroughs on the commission.

What is red tape? By one definition it is the excessive formality and routine required before official action can be taken and by another the official rules and processes that often seem unnecessary and delay results.

For a year, the Commission held hearings and listened to small business owners across the city. An online survey of almost 300 entrepreneurs, including many members of the Queens Chamber, was conducted as well.

On March 29, Comptroller Stringer released the Red Tape Commission’s final report. It is a comprehensive review of New York City bureaucracy, including more than 6,000 rules, 250 licenses and permits, and 15 agencies that every small business owner must navigate.

Some findings of the online survey are:

• Broad dissatisfaction with City agencies: When asked to grade city agencies on a scale of 1-5, with 1 being very unsatisfied, business owners gave most agencies a grade of 2. The Department of Buildings, Office of Administration Trials and Hearings, the Taxi and Limousine Commission and the Department of City Planning were cited as the least satisfying to engage, while the Fire Department and Department of Small Business Services got the highest marks.

• Painfully slow permit and license approval processes: Nearly 30 percent of small businesses surveyed said it took them six months or longer to get all the approvals they needed from the City to open for business, and 13 percent took more than a year.

• Lack of fairness, information and communication: Nearly half of all business owners surveyed (48 percent) said they did not feel like they had been treated fairly by city inspectors, and more than 58 percent said agency inspectors had failed to adequately communicate expectations and requirements.

• Privately hired “expeditors” add cost but little value: Nearly 40 percent of small businesses surveyed said they found it necessary to hire a private “expeditor” to navigate the City bureaucracy, but more than half said spending the extra money was neither helpful nor effective.

• Frustration over City policies: Asked to identify their single greatest frustration with City government, fines and inspections were cited as the most common complaint among those surveyed (20 percent), followed by agency response times (18 percent) and high taxes and fees (17 percent).

The report recommends 60 Ways to Cut Red Tape and Help Grow Small Businesses including:

• Establishing clear timelines for the approval of permits and holding agencies accountable if timelines are not met.

• Abolishing expeditors at the Department of Buildings and creating Small Business Advocates in relevant City agencies.

“The (Red Tape) Commission heard from small business owners about the challenges they face as a result of outdated, complicated and costly rules and regulations imposed on them by city government,” said Queens Chamber Executive Director Thomas J. Grech in an April 2 email. “The Chamber has successfully advocated for many regulatory reforms and reductions in fines over the past few years, many reforms are still needed. We hope to work cooperatively with the City to implement many of the report’s findings.”

For the full Red Tape Commission report, visit http://comptroller.nyc.gov/wp-content/uploads/documents/RedTapeReport.pdf

For the 60 Ways to Cut Red Tape, visit http://comptroller.nyc.gov/wp-content/uploads/2016/03/Red-Tape-Solutions...

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