City Agency Confirms Small Business Fines A Revenue Ploy

The Department of Consumer Affairs (DCA) has admitted to hiring extra staff to dole out more fines on small businesses to make up for a budget shortage. The New York Post is reporting that DCA Commissioner Jonathan Mintz doubled the agency’s revenue by hiring more inspectors, and made remarks to the City Council that pretty much confirm what we thought all along: city officials see fining small businesses as a means to generating revenue.

According to the Post, Mintz’s plan, which saw the hiring of 14 new inspectors, was laid out before the City Council during a hearing in 2011:

“It will bring in an additional $1.6 million in revenue in the new fiscal year,” Mintz told the City Council at the time.

“These staff additions will enable DCA to focus on undercover inspections of employment agencies and immigrant-service providers, as well as [make] additional focused inspections of tobacco dealers.”

His projections were right on the money.

The number of violations more than doubled from 10,964 in 2010 to 24,176 in 2012.

Most of the fines were lower than those handed out earlier, meaning business owners were paying more frequently for smaller offenses.

Fines averaged $966 between 2002 and 2009, and $697 after 2011.

While Mintz was open about his policy, opponents to his tactics, including Public Advocate Bill de Blasio, were outraged. As public advocate, de Blasio called for Mintz’s resignation last June, accusing him of using a quota system in his business fining blitz.

Mintz denied those charges but de Blasio’s office found evidence to the contrary:

“Reports of internal DCA documents and interviews with employees in recent days have brought to light a ‘25 percent threshold,’ meaning inspectors are expected to issue one violation for every four businesses they inspect,” according to a public-advocate study.

“Those same accounts confirm agency staff pressured administrative law judges to rule against small businesses’ appeals.”

Fines ranged from $25 for failing to display prices to $10,000 for purposeful use of a condemned gas-station pump.

In their defense, the DCA said that the fines are created by the Council and that it is the DCA’s job to enforce them. DCA spokeswoman Abigail Lootens defended the agency’s actions to the Post.

“Protecting New Yorkers during difficult economic times is a stronger public priority than ever which is why Consumer Affairs aggressively holds businesses accountable,” Looten said.

The Post noted that since 2008, the Council created 38 new laws that can result in penalties for small business owners, including fining stores that sell realistic looking toy guns, tow-truck companies and cigarette retailers.