Council passes tax change, “right to return” bill

Council President Darrell Clarke’s $400 million Neighborhood Preservation Initiative will fund affordable housing, workforce development, and a host of other initiatives.
PHOTO: Metro File

Philadelphia’s City Council on Thursday, in its last session of the year, passed a new tax and made changes to the city’s controversial property tax abatement, and it also approved a legislative package aimed at making sure workers laid-off during the pandemic get their jobs back.

Money from the new tax, a 1% levy on residential construction and major renovation projects, will go toward Council President Darrell Clarke’s $400 million Neighborhood Preservation Initiative.

The program, which will fund affordable housing, workforce development, and a host of other initiatives, will also receive proceeds from a reduction in the 10-year commercial property tax abatement.

Developers, who have been paying taxes just on their land, will have to pay 10% of their property tax for the value of the building, or a 90% abatement.

The tax, which is expected to generate $9.1 million to $11 million a year, and abatement change will go into effect in January 2021, if approved by Mayor Jim Kenney.

It will be enough to cover debt payments on Clarke’s program, which will require a $400 million loan, council officials have said.

As a way to soften the blow to builders, council also approved a bill delaying the implementation of a planned phase-down of the residential portion of the abatement.

Almost exactly a year ago, they passed legislation reforming the program. Where previously, a property owner would have gotten the full tax break for a decade, they would get 10% less each year after receiving a 100% abatement the first year.

The change was set to go into effect at the end of the month, but, thanks to council’s action Thursday, it won’t be implemented until January 2021.

Several residents who testified at the virtual hearing urged council members to reject the bill. The abatement has long been a target of progressives, particularly public school advocates, who say it robs schools of needed funding.

“There’s no better symbol of our city government’s wrong-headed priorities than this policy, which has subsidized developers and rich people at the expense of schools,” said Ronald Whitehorn, an activist and retired teacher who lives in Lawncrest.

City and school tax revenues would not be impacted the first year, since all new abatements would receive the full tax break.

Over three years, it would cost the city a combined $4.3 million, but gains from the decrease in the commercial abatement will more than offset the loss, said Clarke’s spokesman, Joe Grace.

In those three years, revenues from the abatement would experience a net increase of $3.8 million, he said.

Mayor Jim Kenney’s office did not respond to a request for comment on the bills Thursday afternoon, but the Inquirer has reported that his administration supports the legislation.

In addition, a package of bills aimed at protecting hospitality workers passed unanimously.

The legislation requires hotels, stadiums, concert halls and businesses at the Philadelphia International Airport to offer jobs back to employees who were laid off in the wake of the novel coronavirus pandemic.

It also keeps employees from being replaced if a hotel is sold or a stadium or event center contracts with a new company.

Councilwoman Helen Gym’s office said the package represents the first “right to return” law passed on the East Coast.

“There are no hotels or stadiums or Philadelphia International Airport without these people,” Gym said. “They are the backbone of our local economy. They are the breadwinners for their families.”

The legislation was dubbed by its sponsors as the “Black Workers Matter Economic Recovery Package” because many who work in the industry are Black.

If a business cannot bring back all workers, it must offer an available job to the qualified former employee with the most years of seniority, the legislation says.

“I think that everybody in my position should have the right to return to their job no matter how long it takes because nobody lost their job because of something they did,” said Charles Patton, who has worked as a cook at the airport for seven years.

Patton said he was laid off in March and declined to come back at first so he could care for his elderly mother. He asked to be put back on the schedule last month but was later removed because his company determined it was not profitable.

The business is cooperating with him, and his union has recall rights, Patton said.

“I can’t imagine what workers who don’t have some of the basic protections that I have are going through right now,” he added.

The hours-long virtual meeting included a litany of other bills and resolutions.

Councilman Mark Squilla asked to be excused early on, and he later put out a statement saying he contracted COVID-19, becoming the first Philadelphia elected official to disclose a positive test.

Squilla is isolating at home and said he has mild symptoms.

“This virus and the infection are no joke, and I want to emphasize that to my fellow residents in Philadelphia,” he said in a statement.

“While I don’t know exactly how I contracted COVID-19, I do know that I’ve been taking all the appropriate precautions – wearing a mask, maintaining a social distance when I have to go outside, and generally being cautious,” Squilla continued.

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