The Grand Rapids City Commission last week postponed a public hearing on a new ordinance that, as written, is among the most onerous to small businesses as any ever conceived. Business owners must be warned: This is likely to be only the first of many such assaults as the city attempts one treasure hunt after another to plug holes in a budget of red ink.
The ordinance aims especially at “mom and pop” consignment shops within the city — or any business that sells secondhand goods. A city ordinance already requires such businesses to file reports on goods received, but the new ordinance also requires digital photographs of each item, as well as fingerprints of the customer bringing it in, to be transmitted electronically every day to the police department.
During the time of the Great Recession, this makes a “suspect” of any person attempting to sell belongings.
Commissioners noted that similar ordinances exist in Wyoming, Grandville and Kentwood, but Commissioner Walt Gutowski provided a voice of reason in the discussion saying, “This could really cripple a lot of our small businesses, which are the fabric of our neighborhood business districts.”
Indeed, the amount of time required of these small business owners to comply with the ordinance would surely be one of the costs associated with forcing them to provide the city with free (and mostly unnecessary) detective work. Penalties for non-compliance include imprisonment of up to 90 days and/or fines of up to $500 and the cost of prosecution.
Business owners take heed: The city has already established new fees for services such as inspections and planning operations — services likely to back up in the bureaucracy of a depleted work force.
The city is right to take another look, but it should extend to a review of like ordinances and fee assessments that make sustaining a small business in this community an endeavor against all government odds.
The Small Business Association of Michigan announced in late June its initiative to “aggressively hold the new governor and legislators accountable for supporting homegrown business job providers.” During its announcement, the group cited a study by the Edward Lowe Foundation showing that between 1993 and 2007, almost all new jobs in Michigan were created by businesses employing fewer than 100 workers. In the same period of time, businesses employing 500 or more people lost a significant numbers of jobs.
The Lowe study also found that “second-stage” companies produced more jobs in the 15-year period than any other business segment in the state. Second stage was defined as those employing between 10 and 100 workers, with annual sales of at least $1 million, and which want to grow.
Gutowski knows well that small businesses define every neighborhood in the city, and often are the first to offer first employment to young teens.
Small business is indeed the “fabric” not only of the city but of the state of Michigan.