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Nonprofit Newswire | Plan to Provide Jobs for Ex-Offenders a Total Bust

Bruce S Trachtenberg
June 9, 2010

June 8, 2010; Source: Philadelphia Inquirer | A good idea on paper doesn’t always translate to success in the real world, no matter how well intentioned the thinking behind it. That’s certainly been the case in Philadelphia, where three years ago the city unveiled a plan, backed by $5 million, to offer businesses up to $10,000 annually in tax credits, for up to three years, for each ex-offender they hire and keep on payroll for at least six months.

While, again on paper, the idea seemed like a sensible way to help former prisoners from resorting to crime and ending up back behind bars, in reality the program has been a total bust. According to the Philadelphia Inquirer, not a single ex-offender has been hired and not even as much as a dime in tax credits has been used by any eligible business. Not surprisingly, when the program was unveiled three years ago it attracted considerable and extremely positive attention. But in wake of the failure to attract any takers, the city is going back to the drawing board and revising the plan to remove the many objections and obstacles that prevented businesses from signing on.

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Two elements of the plan were considered particularly burdensome. One is a requirement that employers provide $5,000 worth of tuition assistance to the ex-offenders they hire and another mandates that program participants pay the city 5 percent of their earnings to help defray the cost of the tax credits. “That was a killer for the deal,” said Ray Jones, a director at Impact Services Corp., an agency that helps find work for ex-offenders. “You are talking about ex-offenders who in many instances had . . . court costs or child support or other issues coming out of their paychecks off the top. You take another 5 percent off the top and that doesn’t leave a whole lot to live with.”

Another failing in the original plan was that it offered no incentives for nonprofits to take part since they don’t pay the taxes that are eligible for credits. Proponents, however, hope to change that in new legislation being considered. If approved, nonprofits that hire ex-offenders would be able to offer the tax credits to a for-profit business with which it partners.— Bruce Trachtenberg

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