The bill to end hidden tax on New York City business and restore the role of public health
On July 25, 2012, Bill de Blasio, then the city’s public advocate running for mayor, announced his plan to sue the Bloomberg administration for what he called a hidden tax. “Two months ago,” he wrote later that week for the Post, “I tried prying information from city agencies about which violations are generating all the new revenue, which neighborhoods and businesses are being hit hardest, and whether quotas were responsible for driving the record level of fines. Not a single agency turned over the data.”
And one of my favorite quotes: “All these fines belie the myth that New York City hasn’t increased taxes in recent years. On the contrary, these hidden taxes have been hurting businesses more and more with every passing budget.” He later found, according to the Times, that revenue from fines had grown by almost 70 percent in the decade since Bloomberg had taken office, to “roughly $820 million in fiscal year 2011, up from roughly $485 million in 2002.” The Department of Health & Mental Hygiene (DOHMH) alone brought in a peak revenue of $53.6M in 2012, two years after letter grades were instituted, from ~$8M in 2002.
But as De Blasio’s second term comes to an end, the fines continue, and they continued during the darkest year the city has seen in decades. They had to. They were in the budget. Though businesses were mostly shut down, the DOH still collected $8.4M between July and October 2020 after it resumed inspections. For context, in all of 2019, the department collected approximately $30M. Then on February 25 of this year, council members Vanessa L. Gibson and Mark Gjonaj (Chair of the Committee on Small Business) introduced a set of bills that have the potential to finally end this tired game.
Intro 2234 would retroactively refund businesses for fines that should not have been issued in 2020, while Intro 2233 would set a new precedent for how regulations are enforced. Specifically, the bill seeks to: (1) eliminate all punitive fines from every city agency; (2) reduce the maximum cost of remaining fines; (3) introduce warnings and cure periods for violations that do not pose an immediate threat, so that business owners have a chance to fix the problem; and (4) restore focus on education and training.
Bills like these could take months to pass. Our hard deadline is July 1, when the city’s fiscal year starts over again, but preliminary budget hearings have already begun. As the Chair of the Committee on Health, council member Mark Levine, stated plainly during the committee’s hearing on March 15: “Public Health needs to be transformed in the wake of this pandemic. I don’t think we can return to the same Public Health we had a year ago, so therefore we can’t return to the same Department of Health and Mental Hygiene we had a year ago. […] It would be extremely naive to think that we won’t confront this kind of disaster again.”
If what we are after is public health and safety, we can’t rely on businesses being unsafe in order to fund Public Health.
Last March, I was three years into researching how the city might restore the role of its health department, how it was in the days when it ended epidemics — or at least abated them. If what we are after is public health and safety, we can’t rely on businesses being unsafe in order to fund Public Health. That’s just not going to work this year, and it never should have been a reliable option in any year. If these fines are not creating safer space, if restaurants have the ability to buy an A, then the fines do not serve the purpose of a penalty, which is to effect compliance, but rather a tax, which guarantees revenue.
On August 17th, 2020, the DOH announced that it would resume inspections, which were presumably paused sometime in March. This time, though, instead of issuing letter grades and fines for minor infractions, the DOH vowed to focus on preventing the spread of COVID-19. But a gap in the budget still needed to be filled, so the department still managed to collect $8.4M between July and October. Meanwhile, for months, the department had stalled in offering any guidelines for these establishments, even though they were deemed essential and were allowed to continue offering take-out. What this means is that there would not be relief for them if they decided to close. So they were left to figure out how to safely adapt on their own, to reimagine what a restaurant could be. Not more than three days before outdoor dining was allowed to resume at the end of June, the DOH shared a check-off sheet that required restaurants to come up with a plan for safely reopening based on CDC regulations. This return to dining, solely outdoors, also came with its own set of rules regulated by the State Liquor Authority, which issued its own violations.
When I approached publications this time last year about my work, I was either ignored or told it was premature or irrelevant, all the while knowing that the reason we were in a pandemic was that we waited too long, that public health officials were being ignored, told they were premature or irrelevant. I started Grade Pending Press in May 2020 because I couldn’t wait any longer. The deadline for the 2021 city budget was only two months away and I knew it would determine how our health department was going to function, and that this would affect every New Yorker on a personal and professional level. This is what happens after a crisis. We remember that we have a health department. Unless you work as a food provider or healthcare worker, or are in need of public health services, it’s only in times of crisis that we even think about the DOH. And that’s exactly why we’re here.
Public Health has never been popular — because when it works, it’s invisible. It is successful when it prevents something. It doesn’t have the cure but a role far more important, especially when there is no cure. But what we have now are severely underfunded educators who must focus on bringing in a good chunk of their own revenue through fines. So the department hires inspectors to do that, and this is who we see: bill collectors who very much need to find a hidden tax. This creates an impossible relationship between the city agency and the public it is supposed to educate and protect. What’s worse, it pits them against each other in a fight over dollars they both need to do their job, to make the city a safer place.
Nearly four years ago, when my favorite restaurant had to stop serving my favorite meal, I, like most people who work in hospitality, unfairly came to resent the DOH, and so I was both deflated and relieved to find that its inefficiencies are not inherently its own doing. I was relieved that even though the problem was far reaching, it had a source. The fault lies with how our city values Public Health, how we value it, not in times of crisis but every day. It lies with the budget for the resources, training, and programs the DOH needs to do its job, which should be to educate the public, not patrol it for lose change.
It should never come as a surprise that we will never know when the next threat will emerge. The DOH was not created to cure; it’s here to prevent, track, and protect. Despite that need, it has been severely underfunded for decades — starting at the federal level, the state, and right at home in our city budget, which typically gives the NYPD about three-quarters of every tax-levied dollar. Only after a crisis, does the budget temporarily fill the most depleted gaps.
We can’t continue to complain about the inefficiency of a department we consistently fail to fund, or the power of a department we consistently overfund.
This is why nearly four years ago, before Grade Pending Press had a name, I realized that I couldn’t just talk about restaurant regulations without talking about the budget, or about how the DOH was formed in 1866, why it exists. And then I couldn’t talk about the DOH without talking about the NYPD. It’s all connected. We can’t continue to complain about the inefficiency of a department we consistently fail to fund, or the power of a department we consistently overfund.
The NYPD is an agency that we already knew, but it was recently confirmed, trained to use military tactics to treat protestors like terrorists and violate basic human rights last summer under what it called the Strategic Response Group (SRG), according to internal documents obtained by The Intercept. You didn’t even have to be actively protesting, no matter how peacefully. You just had to be out walking around or riding a bike after a certain hour, even if you were an essential worker who the city allowed to be out past curfew. None of that mattered, and no one was listening. So more bodies put themselves in harm’s way — bodies that the city might see as more valuable, bodies who worked in public health — but that didn’t seem to matter either. The NYPD is a union, maybe the oldest one we have, and a powerful one.
It’s a very simple equation. The money comes and goes in a very specific way. None of it is random. So I started to pull at lose string, and kept pulling. And here we are, a few months away from another budget proposal process, another chance at making sense of this mess.
Intro 2233 has the potential to fundamentally change the way this city does business, the way the city’s agencies interact with its public. I hope we’ve learned by now that the value of our economy does not equate to the health of our community — especially when paying taxes feels un-American, where the notion that tax is equal to penalty, that if we’re able to find enough individuals to penalize, the bill will be paid. There are many measures that still need overturning. We need to be cutting off sources of harm whether they are.
At least for the sake of De Blasio c. 2012’s legacy, it’s time, before yet another budget passes on July 1, for De Blasio c. 2021 to remember his words.