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I-Team 10 Update: State regulation "horror stories" on small businesses

Posted at: 02/12/2013 6:05 AM
Updated at: 02/12/2013 11:31 PM
By: Berkeley Brean

We know that so many of you are looking for work or trying to hang on to the job you have. The latest unemployment number in New York state is 8.2%. A lot of small business owners tell us they can't afford to hire more people because of how much it costs them to run their business in New York.

We hear that all the time.

Why is it so expensive?

Scroll down to see the state regulation "horror stories"

The I-Team tracked down information that led us to an answer we didn't anticipate at first.

(We thought the answer would be simple -- taxes -- because we hear that complaint all the time.)

But the stack of papers that breaks down all the fees and fines tied to regulations on businesses in New York is about half an inch thick. We're talking about almost 40 state agencies and departments. Added up it totals $18 billion.

For individual business owners, it feels like they're getting nickled and dimed to death.

Bowling is a pretty simple game. Roll a ball. Knock down the pins. Repeat.

But operating a bowling alley in New York is a different story.

"Each year the mandates the state of New York comes out with gets more and more ridiculous on a small business owner," Roseland Bowl owner Jack Moran said. Moran got into the business 40 years ago. He's owned Roseland in Canandaigua since the mid-80's.

"Was it like this back then?" I asked.
"No. It's never been this way. Only in the recent years," Moran said.

His problem? A relatively new regulation requiring employers to meet with employees to show them their wages and what they should be earning. It's called the wage theft prevention law. Moran says it costs him money because he has to hire accountants and lawyers just to make sure he's in compliance.

"By the time you break out the accountant fees and the attorney fees, it could be anywhere from $3,000 to an additional $7,500," he said.

The fines Moran faces if he's not compliant are bigger than that and when you add up what Moran and many business owner in New York has to pay in fees and fines it is a ton of money.

The list of Fees and Fines

The list of money collected by departments and agencies in New York shows $28 million to the Department of Labor, $181 million to Education, $334 million to Taxation and Finance. The estimated total for 2010 - 2011, the latest data available, $18.1 billion.

"I think that it's still embedded in the state agencies that businesses are not a customer, they're a revenue source," Assembly Minority Leader Brian Kolb (R - Canandaigua) said. It was Kolb's office that did the study calculating the list of fees and fines.

The same study showed the book of Codes, Rules and Regulations for New York state is 82 volumes. 49,000 pages. If you laid out every page it would stretch out 4 and a half miles. That's the distance from the News10NBC studio on East Avenue to the Pittsford Wegmans.

That's the length of 13 Freedom towers in Manhattan.

76 football fields.

You get the picture.

"I'm trying to encourage people to understand that if New York is really open for business they shouldn't have to experience any of these things," Kolb said.

A different story from the Governor

You get a different story from the governor. Here's what Gov. Andrew Cuomo said at his State of the State last month.

"Gone is the obstructionist bureaucratic culture, replaced with a new entrepreneurial government. Gone is the tax capital mentality," Gov. Cuomo said.

The governor said one out of every five jobs created in the country last year was created in New York.

(The Governor) said New York's never been this business friendly," I said to Jack Moran.
"I don't find it business friendly. Being a small business owner here myself, they've made it much more difficult to own and operate a business," he said.

"I believe state agencies still have not gotten the message or received the message that businesses in this state are customers," Kolb said.

So what happens when businesses spend money on fees, fines and lawyer to avoid them? The owners pass the cost onto you. That's what Jack Moran said that to us.

What's the solution?

Assemblyman Kolb said pick up your phone or log into your email and file a complaint with the right state agency. It doesn't mean it will fix the problem over night but it puts your complaint on the record and it's a start.

Facts and Figures

Click here for a facts and figures on the amount of regulations in New York State.

Horror Stories

Click here for 'horror stories" on NYS regulations on small businesses.