Washington's business community is planning a strong attack on proposals by Mayor Walter E. Washington to resuscitate the city's debt-ridden unemployment compensation fund.
At City Council hearings scheduled for later this month, spokeman for business and industry will complain that the Mayor is seeking a sharp increase in employer payments to erase demands for compensation by people who voluntarily quit their jobs or are fired for "gross misconduct."
Specifically, business leaders were upset by revelations in The Washington Post on Oct. 22, that two at large candidates for city's School Board are collecting unemployment compensation - despite other sources of income in their families, savings or additional assets.
Stephen Harlan, managing partner here for the accounting firm of Peat, Marwick, Mitchell & Co. and chairman of the human development bureau at the Metropolitan Washington Board of Trade said yesterday that such individuals should have no claim on the unemployment fund, which now is in debt by some $60 million.
"It doesn't meet the fairness test . . ., he said. At the same time, Harlan emphasized his view that there are widespread misconceptions about the unemployment benefit system.
In particular, he noted that all money in the city's jobless fund comes from employers and the workers contribute nothing. In the end, consumers end up paying the cost through the cost of goods and services.
As city unemployment rose during the recession to record high levels approaching 10 per cent, the amount of money on deposit with the unemployment compensation fund disappeared. A deficit has been growing since 1975.
After Congress raised local benefits here to one of the highest levels in the nation early in the 1970s (the D.C. maximum payment of $148 a month is exceeded only in three states), the Board of Trade anticipated a future crisis with the fund and commissioned a study of future alternatives.
The study, offered to the city government in 1975, recommended an increase in the maximum contributions to the fund by employers as well as new standards for eligibility, to eliminate persons who quit work or were fired for good reason.
In effect, in recommendations to the City Council on Sept. 9, Mayor Washington backed the increased payments by business but did not propose drastic changes in eligibility.
Several business leaders sat around a table at the Board of Trade yestercity that would be a disincentive for They concluded it amounted to initial construction of a "wall" around the city that would be a disincentive for companies to hire workers or stay in the city.
B&B Caterers president Carl Longley said that for each of his workers in 1973 he contributed $4.20 to the jobless fund: under the Mayor's plan, the cost would be $222 per worker next year, Longley added. That sort of increase in costs could "bankrupt a smalemployer . . . or even a large company," he said.
For the Nov. 16 issue of the Board of Trade's own newspaper, organization president and realtor Foster Shannon has written an attack on the Mayor's plan as a "bad" proposal, one that makes jobless compensation a sort of welfare system.
The mayor's idea that a 1 per cent surcharge through 1981 will erase the deficit (a cost of $63 million from D.C. corporate treasuries) "should be going to create new jobs . . . that's a price the community cannot afford to pay," Shannon wrote.