Thursday, June 25, 2009

Sign of Bad Economic Times; or "Minor Economic Issue?"

Yesterday, as the NY Daily News reports, the city 's Board of Health passed a regulation requiring stores to post large anti-smoking signs: "The health department wants to serve up something new at your corner bodega - a fresh slice of blackened lung. The grisly image is one of several new anti-smoking ads - as big as 3 feet by 3 feet - that new Health Commissioner Thomas Farley wants to post at the cash registers of every store in the city that sells cigarettes."

Once again, the city goes after the legitimate cigarette retailers-regulating rather than legislating-while allowing the black market to flourish. As we told the News: "The signs are counterproductive to the viability of these businesses," said Richard Lipsky, spokesman for the Neighborhood Retail Alliance, who said many shopkeepers are paid to display cigarette ads. "The profitability of these stores is going to be eroded." Others said a 3-foot-square sign would be difficult to accommodate, especially in a space as small as a newsstand."

Since the mayor passed the largest percentage tax increase in the city's history-the 1800% hike in the cigarette tax in 2002-60% of all tobacco sales have suffered a forced migration to the black market or Internet; a $250 million loss to area bodegas, newsstands and green grocers. Mike Bloomberg, deriding the concerns of small shopkeepers, called the loss, "a minor economic issue." And the mayor has done little to aggressively interdict the illegal sellers-preferring to crackdown on the legal store owners.

As Robert George pointed out at the time: "Bloomberg earlier this year raised the city tax on a pack of cigarettes by $1.50. That means the average pack of cigarettes in New York City costs about $7.00 (the state had raised its own tax on the not-yet-illegal substance last year). Yet, two months ago, the association that represents bodega (Puerto Rican deli) owners, protested on the steps of city hall to say that the cigarette tax was killing their business. Bloomberg stunningly responded to the protests, "I just find it inconceivable that you could equate people's lives — particularly children that buy cigarettes in bodegas — with a minor economic issue…Let's get serious!"

And these store owners are now suffering the worst effects of-not only the recession-but of the city's anti-small business policies; and we are experiencing the the highest levels of bankruptcies and store evictions in the city's history. On Monday, over 60 small business and advocacy groups will be gathering at city hall to promote a Robert Jackson-sponsored bill that would mitigate evictions through mandatory arbitration. But, as far as we can see, the Bloombergistas remain tone deaf.

And, if the mayor's five borough economic plan ads is examined, a total psychotic break; since, under the mayor's less than watchful eye, stores are dropping like flies-with for rent signs becoming ubiquitous all over the neighborhoods of the city. But tobacco is fair game, no matter how much the ubber-regulators may hurt the local merchants. And the state has chimed in with an exorbitant increase in tobacco registration fees.

The health of New Yorkers is an important target for policy makers; but so is the health of small stores. Taking away bodega ad space for another warning sign is just another example of the idée fixe of Mike Bloomberg and his regulatory crusaders. Pretty soon, we're gonna have ten foot anti-smoking signs plastered all over the windows of the proliferating legions of empty store fronts.