State strangles local business

EVERYBODY LOVES SMALL BUSINESS. Our neighbors own them. They’re the backbone of the community. But you know how it is, the urge to shop is stronger than love, and now and then, mysteriously, I find myself at some big box store in Greenport, Albany, Pittsfield, Kingston…. It doesn’t matter where; they know what I want, and it’s on sale.

Consumers like me have plenty of company when it comes to divided loyalties over small business. Elected officials never tire of reminding us that small business is the engine of economic growth and the source of most new jobs. They heap praise on small businesses, but they win elections with cash from huge corporations. In return, big firms get laws and regulations that meet their needs; or if they don’t, they move their operations offshore and claim a tax break.

Big companies sometimes make bad decisions that ruin them. That’s not the fault of government. But when small business owners get a raw deal from government, it can destroy a business and send a message that discourages others from pursuing the entrepreneurial dreams that built this country. You don’t have to look farther than the Corner Store in the Village of Chatham to see that drama unfolding.

Last summer Nirmal Bajwa and Narender Sharma, who had owned a convenience store that was part of gas station chain decided their rent was too high, so they got a new place, no gas pumps, just a storefront up the street on Hudson Avenue. They had a state license to sell beer at their old store and filed the required paperwork with the State Liquor Authority (SLA) to have the address on the license changed from their old store to their new one.

They opened their new business, the Corner Store, in July. They followed all the requirements set by the SLA, but they heard nothing for months. They have been in this business a long time, and they know that the sale of beer determines the success or failure of shops like theirs. They’ve put their life savings into this store, and they have watched helplessly as their resources have dwindled.

Finally, after an inquiry by state Senator Steve Saland’s office, they learned that their request to move the license had been denied. Why? Because the SLA determined they had “abandoned” their license when they moved across the street to their new address. The SLA came to that conclusion by making a phone call to the new owners of the store at the gas station; in other words, the state made its decision based on calling the wrong number, even though the Corner Store application had the correct number.

Making the situation worse, state bureaucrats, when they answered their own phones, kept demanding more information from Mr. Bajwa, as if a decision hadn’t been made. Four months later, the SLA still had not acknowledged its error, and though there is some movement, the fate of the Corner Store remains in doubt.

Here’s where I’m supposed to call for an investigation of the SLA to expose its incompetence or worse. But listen to this: “…statutory overhaul would be futile unless and until the dysfunctional and programmatically-challenged SLA is rehabilitated…. Since its inception, the SLA has been plagued with problems of licensing delays, inadequate enforcement, inefficient and ineffective administration and, indeed, bribery and corruption.” That’s from a report released just over a year ago by the New York State Law Revision Commission appointed by the state legislature.

This state agency regulates a $40-billion industry. It costs $18 million to run, if you can call it that, and it collects $54 million in fees and fines. The SLA generates more revenue for the state than all but two other agencies: the tax department and motor vehicles. Yet it’s so strapped for people and resources it might as well close up shop.

The Corner Store’s dilemma doesn’t come from too much regulation. The state has a clear obligation to regulate the alcoholic beverage industry. The problem lies in the failure of political leaders to emphasize the importance of making sure small businesses don’t get screwed because some bureaucrat calls the wrong number.

The state faces huge deficits. There won’t be money to fix things for a while. To save businesses like the Corner Store, we have to hold our elected officials accountable for making sure resources go where they can do the most good, which means, simply, that bureaucrats understand that the small guy matters.   

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