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Today in New York City, more than 25,000 men and women are on parole from state prison. Roughly half of them are unemployed. Nearly a quarter of parolees statewide will return to prison within two years of their release, if recent history is any predictor. Those figures don’t even include the tens of thousands released from city jails each year.

The low employment rate is partly explained by the fact that an ex-convict is less likely to have a high school diploma, and more likely to have a history of substance abuse and mental health problems, than someone in the general population. But it also reflects the widespread reluctance of employers – for reasons ranging from liability issues, to concern about backsliding, to simple prejudice – to hire people with criminal records.

In an effort to chip away at that reluctance, City Councilmember Letitia James, a member of the Working Families party from Brooklyn, will introduce a resolution to Council at its Feb. 1 meeting that proposes granting tax credits to businesses that hire “qualified ex-offenders.”

The resolution calls for the state legislature, which has considerable authority over the city’s taxes, to adopt legislation that would allow the city council to amend local tax laws to include the credits. State Assemblyman Hakeem Jeffries and State Senator Velmanette Montgomery, both Democrats who represent districts in Brooklyn that overlap with James’, have said they will introduce the necessary legislation at the state level. Also pledging logistical support is a group of community organizations that includes the Fifth Avenue Committee, the Crown Heights Mediation Center and the Doe Fund, an organization providing job training and placement services for ex-offenders.

A tax credit program that aims to expand the job market for ex-offenders would represent a “monumental step towards reducing the correlation between poverty, high unemployment, incarceration and crime,” James said at a Jan. 18 press conference at City Hall, surrounded by some 30 supporters, including a dozen Doe Fund trainees in matching bright-blue pants and jackets. “For all of us, it’s a challenge. But either we pay now or we pay later.”

The resolution is short on details and doesn’t specify a dollar amount, but James has said that her proposal is modeled closely on a tax credit passed by the Philadelphia City Council last October that provides $5,000 for each new job a business creates for an ex-offender. It was brought to James’ attention by her pastor, Rev. Anthony Trufant at Emmanuel Baptist Church in Brooklyn. Trufant, who has long been concerned with integrating ex-offenders into the community—“There isn’t a church in the borough that is not dealing with this,” he says—happens to be the brother-in-law of W. Wilson Goode, Jr., the Philadelphia city councilmember who spearheaded the tax credit program there.

Although Trufant says that helping ex-offenders rejoin the workforce and the community is part of the church’s “moral imperative,” he holds up the public safety implications as an equally important consideration. In many cases, Trufant suggests, the lack of services for ex-offenders—a population that includes those on probation as well as former prisoners—causes many ex-offenders to become re-offenders, committing crimes in their neighborhoods out of financial desperation or “angst” stemming to some degree from their inability to find housing and work.

“It’s not simply a moral issue,” says Trufant, referring to the tax credit proposal. “It really is a practical strategy. The truth is, people are coming back home to these neighborhoods in record-breaking numbers, and the only question becomes: Will they find adequate opportunity when they return? I’m not suggesting that they necessarily merit an opportunity. I’m stating unequivocally and emphatically that they need an opportunity. Otherwise, they will be returning [to prison or jail]. And before they return they will wreak havoc.”

“Recidivism is caused by economic frustration,” says James, explaining the rationale for her plan. “The vast majority of these individuals are non-violent, but they will resort to fast money, which includes drug-dealing. And that brings with it a host of social costs.”

It’s an open question whether a $5,000 tax credit is enough to get ex-offenders hired more and returning to jail less. Philadelphia’s program is not yet underway, and beyond that there is little precedent for James’s proposal.

There’s also no conclusive evidence that tax incentives increase employment among ex-offenders. In fact, re-entry experts say, the available evidence suggests that tax credits may not be enough to override employers’ concerns – about liability, or the cumbersome paperwork required (a deterrent for small businesses especially).

Most notably, an existing federal tax credit known as the Work Opportunity Tax Credit (WOTC), which provides up to $2,400 for hiring ex-offenders, appears to be underutilized. Though the WOTC is far broader than the credit proposed by James – in addition to ex-felons, the program targets the mentally and physically disabled, among other groups – fewer than 800 WOTC credits have been issued in New York City over the past two years, and to just 120 employers.

“When you talk to employment programs that work with people with criminal records, what they tell you about Work Opportunity Tax Credits [and other financial incentives] is that it’s often the icing on the cake,” says Debbie Mukamal, the director of the Prisoner Re-entry Institute at the John Jay College of Criminal Justice. “It’s the deal closer. It’s not going to be what changes an employer’s primary decision whether or not to hire.”

Glenn Martin, the co-director of the National H.I.R.E Network, a re-entry policy organization based in Manhattan, agrees that tax credits are a useful deal-sweetener for job-placement organizations to have at their disposal.

But, he adds, the consensus in the re-entry community is that employers seem more attracted to wage subsidies, in which an agency or organization pays a portion of an ex-offender’s salary, than tax credits. Wage subsidies are to tax credits what a discount at the register is to a mail-in rebate.

Still, Martin notes that the tax credit that James would like to implement in New York more than doubles the WOTC. “Five thousand dollars is a different story,” he says. “If New York came out of the gate with $5,000, you may get the same effect as with subsidies.”

Heeding the advice of Martin and other experts, James is pursuing a parallel wage-subsidy initiative at the city level, alongside her tax credit resolution. Although the specifics have yet to be decided, James says she is planning to meet with the mayor’s office soon to discuss the initiative.

In the meantime, Jeffries and Montgomery have begun to rally support in Albany for the tax credit proposal. Re-entry experts think it might help that the social consequences of incarceration and recidivism are receiving more national attention – for example, in his 2004 State of the Union address, President Bush proposed a $300 million initiative for job training and transitional housing for former prisoners. Martin says that “made it okay for Republicans to talk about re-entry.” The new governor should help their chances, too, they say.

James, who served as an assistant attorney general under then-Attorney General Eliot Spitzer, agrees. “I think the Spitzer administration will be more responsive than the former administration,” she said.

– Ray Hainer

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