Philadelphia city wage taxes are filling city coffers this spring at the fastest rate since the U.S. economy slumped in 2008.
The city collected $519 million from its tax on workers' paychecks through April 30, up from $505 mil- lion last year at this time and $485 million in 2009.
The total still lags the $534 million Philadelphia collected from wage earners in the first four months of 2008, when the tax rate was slightly higher than it is now. Philadelphia currently clips residents 3.928 cents of every dollar they earn; nonresidents pay 3.4985 percent.
Telecommunications companies (think Comcast and Verizon), insurers, temp services, doctors' offices, hotels, restaurants, sports teams, and ad agencies boosted payroll this year, compared with last year, according to data collected from the city by the Pennsylvania Intergovernmental Coordination Agency (PICA), the watchdog office charged with making sure elected city officials don't spend more than they raise.
Compared with April 2010, employment was flat or declining at colleges, law firms, drugmakers, and construction firms. The drop was especially rapid, greater than 10 percent, among arts and entertainment groups and federal agencies.
Most city employers haven't recovered to 2008 levels, even considering today's slightly lower tax rate. The big exception is health care, where wage-tax collections topped $100 million in the first four months of the year - for the first time. Hospital and university complexes at Penn, Temple, Jefferson, and Drexel rank among the city's top employers.
Overall, both wage and profit taxes have been rolling in at modestly
higher-than-expected levels so far this year, PICA executive director Uri Monson told me.
That doesn't mean Mayor Nutter has a fat surplus to give away to the schools and other cash-poor services. The modest gains have been offset by higher expenses, including an extra $12.5 million in payments to city workers' pensions to cover costs deferred from 2010, plus back overtime pay for emergency- medical-service workers, higher police overtime, and higher court costs, PICA reported.
Tasty Baking Co. was the fourth-largest, and the fastest-growing, snack-cake brand in the United States in the months leading up to its purchase (at a fraction of its former price) by Georgia-based Flowers Foods, according to a new report by analyst Mitchell B. Pinheiro at Janney, Montgomery, Scott L.L.C.
Pinheiro told clients that Tasty's two plants, the new South Philadelphia bakery and the frying plant out in Oxford, which makes honey buns for Wal-Mart (20 percent of total Tasty sales), can be expanded to handle more Flowers products, which include Mrs. Freshley's doughy, sugary snacks.
Tastykake might be able to fit $500 worth of additional Flowers products on its 1,000 routes per week, a modest boost to the $7,000 per week that Tasty routes currently sell, by Pinheiro's estimate. Tasty may also help get Flowers' Nature's Own breads into Northeast U.S. supermarkets, and maybe into Wawa (which buys 10 percent of Tasty's production).
It's not what you get, it's what you keep: On its own, Tasty wasn't able to convince investors it could translate rising sales into bigger profit.
Constar International L.L.C., a maker
of plastic bottles and food bowls in Northeast Philadelphia, says it has emerged from Chapter 11 bankruptcy,
for the second time in two years.
The company, a leading maker of polyethylene terephthalate (PET) containers, says it has reorganized effective
May 31, after filing for protection Jan. 11. This bankruptcy resulted from the loss of its biggest customer, PepsiCo, which started making its own bottles, as my colleague Harold Brubaker reported at the time.
The reorganized Constar, run by chief executive officer Grant Beard, relies on
financing from three companies: Wells Fargo Bank, which has given Constar a credit line for ongoing operations; Black Diamond Capital Partners L.L.C., a $6 bil- lion-asset Chicago buyout firm, now Constar's largest investor; and troubled-asset specialist Solus Alternative Asset Management L.P., of New York, Constar's second-largest investor.
In a joint statement, Black Diamond principal Les Meier and Solus managing director Mark Lawrence said they had seen "tremendous opportunity in building the company into a premier global-packaging supplier." Beard thanked financial creditors, customers, suppliers, and workers for sticking with Constar through its reorganization.
Constar was spun off by Crown Holdings, the former Crown Cork & Seal, in 2002. As of January, it employed about 850, down from 1,570 at its previous bankruptcy filing in 2009.