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Senator Bob Casey Proposes Special Tax Credit for Promise Zones

June 24, 2014 Category: PeopleUncategorized

 

Local stakeholders in West Philadelphia Promise Zone gathered for announcement of new legislation to aid community.


Sen. Bob Casey announced a bill last week to create special tax credits for businesses who hire from within one of the five Promise Zones designated by the Obama Administration. The Pennsylvania senator made his announcement in front of a coffee shop on Lancaster Avenue, which is located within the West Philadelphia Promise Zone that stretches from the Schuylkill River to 48th Street and from Samson Street to Girard Avenue.

If passed, Casey’s bill would be the first piece of legislation to give the Promise Zone initiative some real teeth in terms of providing support that is not already available.

“The challenge of the Promise Zone is that it doesn’t come necessarily with any specific allocation of funds,” said Farah Jimenez, president and CEO of the People’s Emergency Center, a community development corporation based in West Philadelphia.

For the West Philadelphia Promise Zone, which contains neighborhoods like Mantua and West Powelton, there is a desperate need for assistance. The area has a population of 35,315 and a poverty rate of 50.78 percent, according to the City of Philadelphia. This rate is nearly the double the city’s average poverty rate.

The only current guarantee to stakeholders within the Promise Zones is that the federal government will prioritize their applications for existing programs. This allows applicants from the zone to cut through the red tape and get faster access to assistance. However, given the timeline of federal programs, there have been few tangible benefits in the first six months.

“Federal funding cycles take a substantial amount of time,” Jimenez said. “They take a long time to apply, and then there is a long deliberative process that happens at the federal level.”

She added that the life cycle of a federal application is about nine to twelve months.

Casey’s bill would create a new tax credit for employers who hire from within the zone. The credit would apply to the first $15,000 of income. Employers from of outside of the zone get a 10 percent credit, while employers within the zone get a 20 percent credit.

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“Providing tax credits for job creation and allowing small businesses to more quickly write down their infrastructure investment can help create jobs and boost economic growth,” Casey said during the announcement.

In addition, the bill would allow businesses to deduct the full-cost of capital investments in the first year of the expense. This is called a bonus depreciation — more on that here.

Jimenez, whose organization has worked in Mantua for over 40 years, said she is hopeful about the Promise Zone designation regardless of what federal programs are created.

“What has happened is that the designation alone has brought a lot of attention to our community, and in doing so has the potential to bring private resources as well,” she said.

Photos via People’s Emergency Center

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