A D.C. City Council committee yesterday approved an overhaul of the city's unemployment compensation program that includes a new "solvency tax" intended to repay a $64.4 million debt to the U.S. Treasurey.
As voted, 2 to 1 by the council's Employment and Economic Development Committee, the measure would deny any payments to people who quit jobs without good reason or who are fired for gross misconduct.
Yesterday's action sent the measure to the full council for action, probably next month.
Although the Metropolitan Washington Board of Trade, an employer group, clashed earlier with organized labor over the proposed denial of payments to the two groups of jobless workers, their spokesmen were near agreement on the final version.
The measure requires the city's Unemployment Compensation Board to draft regulations under which the new rules would be administered, and to submit them to the council for its approval. Those regulations would set the terms for enforcing the denial of payments.
Robert E. Petersen, president of the Greater Washington Central Labor Council, AFL-CIO said his organization would support the bill if prompt public hearings are held and the regulations satisfy labor's concerns.
If the jobless pay claims are "frivolous or fraudulent, then they (the claimants) should be penalized," Petersen said. "We don't want people to rip off the system. But the wrong rules could penalize lots of innocent people."
M. Brent Oldham, chairman of the Unemployment Compensation Board, said he plans public hearings, probably after enactment of the bill.
The city's compensation fund, financed totally by payroll taxes paid by employers, as drained by the recession of the mid-1970s and was kept operating by loans from the U.S. Treasury that now total $64.4 million.
To pay that back by 1982, the new measure would impose a 0.9 percent surtax - called a "solvency tax" - on top of the basic payroll tax.
The present basic tax is a flat 2.7 percent on all covered payrolls in the city. The new measure calls for a sliding scale ranging from 0.1 to 4 percent.