First-time fines squeeze NYC's small businesses: report

Fines given to small businesses for first-time violations may be a big headache for owners, but they're also a big money maker for the city.

The Public Advocate's Office will release its "Red Tape Report" on Tuesday outlining how businesses are getting financially squeezed for easily correctable violations, such as printing errors on receipts or insufficient signage.

Meanwhile, the city's Department of Consumer Affairs expects to earn more than $10 million in revenue from fines in fiscal year 2012, up from $6.8 million in 2009, according to the report.

"They're just trying to kill my business. I'm pretty upset," said Tony Juliano, co-founder of XES Lounge in Chelsea. The bar was recently hit with a $500 fine for lacking certain smoking-related signage that Juliano said he didn't know was required.

He said he's previously permitted smoking throughout his backyard patio, but was also fined after inspectors considered the area the same as a sidewalk cafe -- even though the bar doesn't serve food.

(Water, however, is still considered "food" by the city.)

According to the health department, restaurants must post no-smoking signs inside the establishment, and outdoor seating areas can only permit smoking in 25% of the space.

Public Advocate Bill de Blasio said there should be "commonsense enforcement," and "if we want small businesses to create jobs and put New Yorkers back to work, the city can't keep issuing fines for every violation under the sun."

The DCA says that businesses don't often get fined for a single violation, and a city regulatory panel last year gave recommendations to help small businesses.

But de Blasio's report calls for city agencies to adopt guidelines across the board allowing certain first-time violations to be fixed without businesses incurring automatic penalties. Owners should also be able to contest agency fines either online, by phone or in the mail, the report states.

Currently, only certain agencies, such as the health department, allow businesses to contest violations online, but consumer affairs and sanitation do not.

The Public Advocate's Office is also launching a small-business hotline for reporting issues with fines. Info: 212-669-4691.