It was an idea successfully peddled by Michael Nutter even before his mayoral election: Offer tax credits to businesses that hire ex-offenders.

But with the program up and running for nearly three years now, the administration finds itself working to save it, acknowledging that while it earned Nutter national recognition early on, no employer to date has actually applied for one dime of the $5 million in tax credits available each year. And nobody has been hired.

"We try to fix a lot of things at once, and it does take time around here," said Everett Gillison, Nutter's deputy mayor for public safety, who oversees the initiative.

Nutter had conceived of the program as a crime-fighting tool, anticipating that providing jobs to former prisoners would help keep them from committing crimes again.

Businesses that participate can receive tax breaks of $10,000 a year, for up to three years, on the business-privilege tax they pay for each ex-offender they hire for at least six months.

To pay for the program, the administration put aside $5 million annually, restricting participation to 500 ex-offenders yearly.

Upon its implementation in 2007, media outlets invited Nutter to publicize the program. A national nonprofit, the Democratic Leadership Council, christened him as the "New Dem of the Week" for implementing it.

But locally, employers and ex-offender allies alike complained about the program's burdensome requirements - requirements that the administration is now asking City Council to lift before recessing June 17.

"It wasn't working the way it was envisioned to work, so we had to figure out how to make it easier," Gillison said. New legislation was approved last week by Council's Committee on Commerce and Economic Development.

Among the changes, the administration is hoping to remove a stipulation that employers provide $5,000 worth of tuition assistance to the ex-offenders they hire.

At the same time, ex-offenders would no longer be required to give the city 5 percent of their paychecks, as a partial reimbursement for the tax credit. This provision was particularly loathsome because of the cumbersome paperwork involved, said City Councilman W. Wilson Goode Jr., who last week introduced a bill revising the program on the administration's behalf.

"That was a killer for the deal," said Ray Jones, a director at Impact Services Corp., an agency that helps find work for ex-offenders. "You are talking about ex-offenders who in many instances had . . . court costs or child support or other issues coming out of their paychecks off the top. You take another 5 percent off the top and that doesn't leave a whole lot to live with."

Under another change, businesses would no longer have to pay former prisoners 150 percent of the federal minimum hourly wage. Employers told Gillison that could result in ex-offenders earning more than other employees for the same work.

The administration is also seeking to make the program more palatable to nonprofit organizations, which provide a majority of support to recently released prisoners.

Since nonprofits don't pay business-privilege tax, there was no incentive for them to participate in the program. However, the new legislation would make the tax credits "portable," allowing a nonprofit that hires ex-offenders to offer the credits to a for-profit business that it partners with.

Ex-offenders eligible to find work through the program include those released from a city prison in the past seven years, or from a state facility in the past three years. All potential employees must have lived in Philadelphia for at least a year before going to jail.

While Goode hardly considers the tax-break program to be a success, he praised it, and the Nutter administration, for bringing attention to the difficulties ex-offenders face when they are released. "It is clear this administration has accomplishments on this issue, even without any initial success with the tax-credit program itself," he said.

According to Gillison, to date the Mayor's Office of Reintegration Services for Ex-Offenders, which partially manages the tax-credit program, has used other initiatives to help find jobs for 375 ex-offenders.

Although Nutter has called for City Hall to step up and also hire former prisoners, Gillison said fewer than 10 ex-offenders are new to the city payroll. "The city hasn't exactly been hiring," he said, referring to fiscal restraints that led Nutter to put a freeze on filling most jobs.

Contact staff writer Marcia Gelbart at 215-854-2338 or mgelbart@phillynews.com.