New York Doesn't Know How To Regulate Your Friendly Neighborhood Halal Cart

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The city's Independent Budget Office published a first-of-its-kind report [pdf] today examining how much money the city spends and collects through the regulation of street vendors. The numbers are a little surprising -- according to the IBO, street vendors still owe nearly $15 million in unpaid fines to the city, which spent half of that last year on enforcement and regulation and collected a meager $1.4 million in revenues from paid fees and fines.

Regulating street vendors is usually left to city police and health inspectors, but the costs of enforcement dwarf what New York actually takes in after all the fines and summonses are issued.

The IBO estimates that in 2009, NYPD enforcement alone costs the city almost $4.5 million. And while the health department spends only $1.8 million on inspections, it turns another $458,000 over to the Department of Consumer Affairs (which spends an additional $65,000 of its own to issue the licenses in the first place). Finally, the Environmental Control Board (another, separate city agency tasked with hearing the vendors' actual cases) spent $590,000 to regulate vendors. Sound complicated?

The city's total enforcement costs? A whopping $7.4 million ("whopping," especially, when compared to the paltry revenue it actually collects). From the $15.8 million in fines the city levied in 2008 and 2009, it collected less than $900,000.

The city (and the vendors) are of course hampered by a maze of convoluted regulations that govern sidewalk sales; a bureaucratic nightmare that includes varying sets of rules and permits that depend on who's selling what, when, and where.

For general merchandise, a myriad of separate licenses exist, including specialized licenses for military veterans, individual boroughs, seasonal carts, year-round carts, and vendors who sell books or artwork and are entitled to specific First Amendment protections.

Meanwhile, a whole separate set of permits exists for food vendors, who not only require two authorizations from the city health department (a license to sell food, and a separate permit for the food cart), but also a certificate from the state's Department of Taxation and Finance (and then a clearance from the city's Department of Finance confirming that the state's certificate was issued).

In addition to the patchwork of permits, there are several restrictions and bans on when and where vendors can set up shop. These rules, too, vary -- different regulations apply if you're in a park, on another block, or even the opposite side of the same street. (The report, for instance, points out that it's legal to peddle on Fifth Avenue in front of the Met, but not across the street from it.)

But it's not just the city that can't "follow the money." Even the state's Department of Taxation and Finance has trouble keeping up with street vendors.

"One complaint often made about street peddlers is that they underpay -- or do not pay --sales tax," the report says. "IBO explored this assertion and was unable to find data that would verify or refute it," it continues.

Officials from the state's Department of Taxation and Finance told the IBO it doesn't distinguish between street vendors and storefront merchants, so the department has no way to track sales tax paid specifically from street cart vendors. In the '90s, the state did pass a law aimed at improving vendors' compliance with tax laws, but it was never implemented because the regulations to enforce it were never written.

[shernandez@villagevoice.com]

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