Comptroller Review Finds City’s Small Business Forward Program Failed to Cut Red Tape or Limit Fines

New York, NY — A new review conducted by auditors of New York City Comptroller Mark Levine found the Small Business Forward program, aimed at easing regulatory and financial burdens on small businesses across the five boroughs, failed to achieve meaningful change for small businesses in New York City. Vague definitions, a lack of inter-agency engagement, and inadequate benchmarking all contributed to the poor performance of the otherwise well-intentioned initiative.

“Small Business Forward was a well-intentioned program designed to cut red tape and fines that are hurting small businesses,” said New York City Comptroller Mark Levine. “But without a clear definition of what a small business is or data to track its success, it’s hard to understand what impact this initiative had. To preserve jobs, help small business owners, and continue to drive down storefront vacancies, this report can serve as a roadmap for the City to ensure this initiative is a success.”

Release of this report comes at a crucial time for the Big Apple’s economy. Small businesses are a major driver of employment, revenue, and economic activity for New York City, yet were hard hit by the COVID-19 pandemic.  Small businesses lining New York’s thoroughfares are essential to the health of both neighborhoods and the economy, underscoring the need for more governmental support.

In 2022, the Adams administration sought to support this sector with Small Business Forward: Review and Reform of Compliance Costs on Businesses, expanding upon Local Law 80 of 2021. It directed six City agencies – the Department of Consumer and Worker Protection (DCWP), the Department of Buildings (DOB), the Department of Environmental Protection (DEP), the Department of Health and Mental Hygiene (DOHMH), the Department of Sanitation (DSNY) and the Fire Department (FDNY) — to assess compliance costs with the goal of reducing fines and allow warning periods for first-time offenders. Agencies were instructed that recommended reforms could not compromise public health or safety.

Yet the report released by Comptroller Levine today found several systemic issues with the initiative’s implementation, beginning with a vague definition of what is considered a small business. That in turn hindered the agencies’ review of 232 regulations driving violations in 2019 – after which exactly half of them were recommended to be reformed. Finally, auditors were unable to find evidence of the City’s claim that some 1,000 small businesses had been engaged via an online survey on key issues they faced.

Key takeaways:

• General Targeting of Commercial Businesses. Because the Executive Order and Local Law 151 only apply to “commercial establishments,” agencies had virtually no definition of what constitutes a small business. Those agencies thus did not receive guidance on the impact fines previously had on those entities, the review found, instead operating on the assumption that an easement on businesses in general would benefit this particular sector.
• Reforms Not Driving Cause of Fines. Auditors reviewed the 116 regulations recommended for reform and found just one-third of them were tied to violations in 2021, meaning a majority of those put forward likely unrelated to fines the small businesses often face.
• No Significant Fiscal Impact. Just three of the 24 regulations that were eventually eliminated altogether turned out to be regularly enforced. As a result, these financial penalties accounted for a mere 0.45% of all fines tied to the 116 regulations originally put up for reform.
• Absence of Success Metrics. The City’s lack of small business tracking was compounded by the absence of whether reforming the violations had led to the intended positive impact. As a result, auditors couldn’t determine if Small Business Forward actually hit its goals.

In January, Mayor Mamdani signed Executive Order 11 of 2026, or “Reducing Fees and Civil Penalties for Small Businesses,” to support the sector. As it moves forward in supporting small businesses, the recommendations from Comptroller Levine’s audit could help ensure future success of the program.

• Enhanced Program Management, Oversight, and Transparency. The Comptroller’s Office urged a lead agency be designated to coordinate its progress, savings, and effectiveness. Additionally, the Office recommended that City Hall issue regular public reports on these metrics, with clear definitions on how it defines success.
• Improved Program Design and Strategic Targeting. The Comptroller’s Office recommends that there should be a uniform, clear definition of what constitutes a small business across all six agencies in the program.
• Strengthened Data Management and Targeted Tracking. The Comptroller’s office recommends that the City integrate a specific “small business” identifier when tracking violation issuances, fine reductions and other actions. This should include a formal, documented methodology to track the impact of the initiative’s reforms.

You can read the Comptroller’s full report, Review of the Small Business Forward Program and Its Impact on Violations Enforcement, at: https://comptroller.nyc.gov/reports/review-of-the-small-business-forward-initiative-and-its-impact-on-violations-enforcement/ 

###