Category: Occupational Licensing

March 13, 2013

Food Trucks, Who’s Your Nanny?

I don’t know about you, but I sure am glad we have LaToya Cantrell making sure food trucks look pretty and Jackie Clarkson looking out for restaurants’ private property rights.

Tuesday, March 12, 2013 saw another round of debate over Councilmember Head’s proposed food truck ordinance changes. I have been critical over a number of the changes, but at least they’re a step in the right direction. However, I’m starting to wonder if the council will even take that first step.

Councilmember Cantrell apparently thinks New Orleanians have difficulty distinguishing between food trucks and carnival-food vendors. How else could she justify suggesting an aesthetic requirement on truck operators? Aside from this being a ridiculous idea, I have a question for Councilmember Cantrell. Who’s aesthetic standard will apply? Yours (which could be awesome or terrible, but that’s irrelevant)? Or will it be some generic, uniform design that will actually make it more difficult to distinguish between the trucks? Newsflash, it is not the role of the government to decide what is aesthetically preferable. Get out of the way and stop playing government Nanny. Aesthetics have absolutely nothing to do with whether the trucks operate in a safe way in preparing food for their customers.

I reserve my most significant outrage for economic protectionist, Councilmember Clarkson. She believes it is her job on the council to protect restaurants from having to compete with those big, bad food trucks who are stealing everybody’s business. Ms. Clarkson does not think food trucks should be able to operate within 100 feet of an existing restaurant. Don’t ask her what a suitable distance is though, she has no idea.

“You’re talking about land owners, private property rights, you’re talking about tax payers on property. I come from that world…I’m trying not to get into measurements with you, and I’m trying not to argue.”

Well Ms. Clarkson, you are wrong in several ways. First, lets talk about those land owners and private property rights. You are allowing restaurant owners to tell other business owners where they may operate on public property (streets). A restaurant’s property rights and land ownership do not extend to the parking spaces on the public street. Also, I fail to see how your argument is in any way logical. Do you complain when a restaurant opens within 100 feet of another restaurant? What about when a bank opens within 100 feet of another bank? A salon 100 feet from another salon? You get the idea. If we were to apply your reasoning to all aspects of commerce we would quickly see New Orleans devoid of commerce. The better idea is that there be no distance requirements. Look at the line of art galleries on Royal St, the bars and restaurants on Magazine and Oak to name just a few examples. When businesses compete with and complement each other it creates thriving neighborhoods and districts. This is what your policy would prevent, Ms Clarkson.

Second, food trucks also pay taxes. They pay sales taxes on all their supplies, they pay fuel taxes on their gasoline, they contribute to payroll taxes, federal and state, for their employees, and they collect sales taxes for the city of New Orleans. The point isn’t that restaurants pay more taxes because of property taxes. That is a choice restaurant owners made when they went into business.

At the core of the issue is that banning food trucks from reasonable operating locations serves only one interest. The interest of a business that has set hours, a set location, seats, air conditioning and heating, etc. This restriction protects the business that already has all the advantages. The public is the group that suffers.

If you keep up your nanny-like behavior Ms. Clarkson, I will be happy to help send you back to the world you so proudly come from next election.

February 26, 2013

Food Trucks Coming to Fat City?

Wednesday, February 27, 2013 will see a measure brought up before the Jefferson Parish Council to allow food trucks to operate in Fat City in Metairie on Tuesdays between 7am and 10pm. While the proposition is laughable, it’s at least a step in the right direction.

However, the same, age-old, debunked myths surrounding food trucks continue to be spread like infectious disease. This time from Drago’s proprietor, Tommy Cvitanovich;

“But it has to be a level playing field. They’ve got to be safe. They’ve got to be inspected.”

Mr. Cvitanovich, food trucks are already regulated exhaustively for health and safety purposes by the state. Also, what do you think isn’t level about the playing field? You have a brick and mortar building, an established clientele, and years of experience running an extremely successful restaurant. And you’re worried about people serving food on private property out of trucks? Sounds to me like you’re not as interested in a level playing field as you are about using the government to protect yourself from competition.

Also, conveniently not mentioned is the fact that Drago’s has their own truck for special events and festivals. Care to explain Mr. Cvitanovich?

May 9, 2012

Hey Louisiana State Legislators, I Found Some New Jobs

Before we get to these new jobs I found for our state, I have a question. What profession has 10x the education/training requirements of an Emergency Medical Technician? If you guessed Cosmetologist, you are correct! I’ve written about the grossly inequitable occupational licensing schemes in Louisiana before, but the Institute for Justice has a new report out that shows us just how bad it is.

Some highlights from the results of the study in Louisiana include our state ranking 43rd in most burdensome licensing laws, and the 8th most extensively and onerously licensed state. Out of 102 occupations in the nationwide study, Louisiana licenses 71. That’s more than any other state and 28 more than the national average.

If our state legislators want to get serious about improving entrepreneurship and income inequality in Louisiana, they should start by taking a hard look at eliminating a large number of these arbitrary impediments.

April 23, 2012

City Council Not Hailing A Cab Anytime Soon

Numerous times I’ve pointed out some of City Councilman Jon Johnson’s dumber comments and ideas. However, I’m happy to say I agreed with him last week. While reading over the Times-Picayune wrap-up of the new taxi regulations, was this encouraging statement, “I don’t know how we can rationally say to someone that … (the) investment can be taken away from him or her without properly compensating that person.”

Johnson’s comment was in reaction to the terrible passage of changing the characterization of Certificates of Public Necessity and Convenience (CPNC) from property owned by driver’s or cab companies to privileges bestowed to them at the mercy of the city council.

It’s bad enough that New Orleans arbitrarily limits the number of CPNCs, but now they’ve made a cartelized system even worse for individual owner-operators and smaller cab companies. What single driver would go to the effort and expense if his livelihood could be revoked at any moment, while also prohibiting him from selling his CPNC to start another career? I highly suspect this was a move requested by companies like United Cab to give them some protection on the back end to make up for the costs they will incur to make the required upgrades. Under the guise of “consumer protection” and “tourism” the council was only too happy to oblige.

January 13, 2012

Where Are All the Microbreweries?

So, you want to start your own New Orleans microbrewery huh? Seems like a cool idea. Shockingly (to me), we don’t have many good, local beers being made in New Orleans or Louisiana in spite of a sizable vibrant, young entrepreneurial population that enjoys knocking back a couple (or few). Surely it’s not lack of innovation or desire. Maybe, just maybe, there’s a roadblock? Well, lets see.

Good tasting recipe, check. Building to brew in, check. Equipment to brew with, check. Awesome design for labels, check. Sounds like you’re on your way. Oh wait, you may want to check here first. That’s where you can read Revised Statute 26 of the state of Louisiana. And there’s more. That’s the requirements of the city of New Orleans. Allow me to save you the drudgery of sifting through the assorted fees, laws, fees, restrictions, fees, limitations, fees, etc. Ladies and gentlemen, I give to you, a step by step guide on how to legally (I’ll leave the business plan to you) start a microbrewery in New Orleans, Louisiana, U.S. and A.

First, you must be at least 18 yrs old, been a LA resident for previous 2 years, be a US and LA citizen, never been convicted of a felony (or your spouse), not owe delinquent sales taxes, submit to fingerprinting (for a fee) and a FBI background check (for a fee), and mail your state and city permit applications within 24 hours of each other.

Next, you must decide if you will be manufacturing beers over 6% alcohol content or producing more than 12,500 barrels (48,438 pints) a year. If so, stop right here. You cannot be a microbrewery or sell on site directly to customers, you must be classified solely as a manufacturer and sell directly through wholesale distributors. Below, I outline the necessary steps for manufacturers and microbreweries.

Manufacturer

Pay the state $1000/year for manufacturing an alcoholic beverage over 6% alcohol content or in excess of 12,500 barrels.
You may only sell your beer to a licensed wholesaler.
Each year you must pay a “gallonage tax” of $10/barrel with no barrel holding more than 31 gallons (248 pints). However, for beers <6% alc. content you may receive a 2% discount on taxes due if you pay them “accurately and timely.”
You must acquire a bond in the amount of $10,000 for each type of permit you hold to guarantee payment of taxes and penalties.
You’re probably going to need an attorney to help you comply with all reporting requirements and to help you understand your contractual obligations in selling to wholesalers.
Since you’ll be operating in New Orleans you must get a local permit and you’ll pay a non-refundable $500 application processing fee, $135 for being a beer business, and a $50 (minimum) occupational license fee.
If your business happens to be in the Vieux Carre Zoning District you must pay a $50 processing fee and a $125 permit issuance fee.

So, it’s pretty straightforward what’s required for being a manufacturer. After investing in creating a product that makes people happy you lose a significant amount of control over where it can be sold. Certainly not ideal.

Microbrewery

Acquire Retailers, Class A permit for $120 that allows you to sell on site but not at wholesale.
Acquire Microbrewer permit for $1000 that allows you to brew and sell no more than 12,500 barrels a year of not more than 6% alcohol content beer.
Since you can sell at retail you must pay a “fee” of $100 for every $100,000 in gross sales.
Each year you must pay a “gallonage tax” of $10/barrel manufactured with no barrel holding more than 31 gallons (248 pints). However, you may receive a 2% discount on taxes due if you pay them “accurately and timely.”
You’re probably going to need an attorney to help you comply with all reporting requirements and to help you stay within the law as a retailer.
You must acquire a bond in the amount of $10,000 for each type (2) of permit you hold to guarantee payment of taxes and penalties.
Since you’ll be operating in New Orleans you must get a local permit to manufacture and you’ll pay a non-refundable $500 application processing fee, $135 for being a beer business, and a $50 (minimum) occupational license fee.
If your business happens to be in the Vieux Carre Zoning District you must pay a $50 processing fee and a $125 permit issuance fee.

In other words, for the desire to have a local business that allows you to interact more personally with your customers and allow them to better sample your product before buying it in stores or at a bar you must limit the upside of your business and variety of your products.

No wonder we don’t see more microbreweries in Louisiana, much less New Orleans. Yes, I’m sure there are other factors as well, such as the inability (I think, but I’m no farmer) to grow hops locally, but do we really need all these restrictions and fees? At a minimum the 12,500 barrel production limit should be increased significantly. Why is 6% alcohol content the dividing line? And why can wine producers sell directly to their customers when beer manufacturers can’t? Also, I think ultimately we need to seriously reconsider the 3 tier distribution system. After researching this article, I’m amazed how cheap drinks are in this city once you take into account the 3 parties who get paid by it’s sale.

Why do we need a middle-man? Especially when a situation can arise where you, as a manufacturer, choose to change wholesalers but by law must wait 24 MONTHS until your new wholesaler can sell to the bars/retailers your previous wholesaler sold to! Why shouldn’t you be able to sell your beer directly to a bar or liquor store who wants to carry your product? Crazy, right? Seems to me that alcohol distributors had a heavy hand in getting this 3 tier system placed into law just to force suppliers to use them. One thing is for certain though, these laws need serious reform. Here’s looking at you, 2012 legislative session.