City Council acts to change business taxes

The fate of the city's renegade raccoons stole most of the attention at Thursday's City Council session, but the members otherwise managed to pass two bills to reform the city's business tax structure.

One of those bills - sponsored by Bill Green and Maria Quiñones Sánchez - has been in the works for three years and would dramatically change the widely reviled business privilege tax.

The second, sponsored by Councilman James F. Kenney, would eliminate most fees for starting a business and would give start-ups a two-year reprieve from business taxes, as long as they hired city residents.

Both bills were approved by the Finance Committee last week after the sponsors reached an agreement with the Nutter administration to phase in the cuts over the next four years. The measure could cost the city treasury millions if not replaced by other revenue.

The fees and taxes long have been blamed for hamstringing the city in the competition with the suburbs and other metro areas for jobs.

Joseph Mahoney, the executive vice president of the Greater Philadelphia Chamber of Commerce, said Thursday that the reforms have been at "very top of the chamber's legislative priorities for many years."

"These bills send the right message to current and potential employers that Philadelphia is open for business," he said.

The Green-Sánchez measure would provide a $100,000 exemption on the gross-receipts portion of the business privilege tax, and businesses would not have to pay the net-income portion on the first $100,000 in sales.

The bill also would make businesses responsible for paying taxes only on sales within the city, a game-changing reform meant to retain and attract large companies.

But if a new company chooses to locate in a building infested with raccoons, it's unclear what the city would do to help.

Councilman Darrell L. Clarke sponsored a bill in the spring to make the city responsible for removing nuisance raccoons from homes.

The administration since has shown little interest in enforcing the ordinance, especially since state law requires raccoons to be exterminated after being trapped.

The Clarke bill passed Thursday asks the city to find a way to handle raccoons without killing them. Several protesters - one brought a sign that proclaimed "Raccoons Have Rights" - said Clarke's bill was illegal and any trapped raccoon would be given a "cruel death sentence."

"To talk so categorically about killing innocent animals is upsetting to say the least," said preservationist and blogger Christina Kobland. "They are gassed, shot, drowned, electrocuted, clubbed, or worse."

But Clarke referred to a woman forced out of her home by a raccoon that had burrowed into her walls. "It's clear we have to do something about that," he said.

"We understand that people love animals. I love animals - in the appropriate place," Clarke said. "These are very large and to some degree very frightening animals."

In other actions:

Councilwoman Jannie L. Blackwell, chair of the education committee, introduced a resolution calling for hearings on the School District's plan to close nine schools and make grade changes at 17 others.

The School District is planning hearings of its own in the neighborhoods, but Blackwell said she was worried that community opinion would not be heard in those forums.

"People are more comfortable when you have at least discussions about it," she said. "I'm not assuming that we will have problems on these things. . . . It's just better to get it done in a public way in a public forum so there's inclusion."

The Nutter administration introduced a series of bills to allow NORESCO, a Westborough, Mass.-based energy-services company, to upgrade four city buildings - City Hall, the Municipal Services Building, One Parkway, and the Criminal Justice Center - in order to cut energy consumption.

The improvements to heating, air, lighting, and other systems are projected to save the city more than $12 million over 15 years, which would more than pay for the improvements. NORESCO guarantees the savings and is required to make up for any shortfall.

Reducing the government's energy consumption was first proposed in the mayor's 2009 Greenworks Philadelphia manifesto, which called for the city to cut use by 30 percent, saving $36 million annually by 2015.

The four buildings, while large, account for only about 2 to 3 percent of the city's energy bill.


Contact staff writer Troy Graham at 215-854-2730, or @troyjgraham on Twitter.