The District of Columbia will need at least two extra years to repay a $66 million loan from the U.S. Treasury as the result of the City Council's vote to remove two controversial provisions from an unemployment compensation reform bill, an official of the program said yesterday.
In a victory for organized labor and a setback for the city's business community, the Council voted Tuesday against proposals to deny jobless benefits to workers who quit jobs without good reason and to those fired for gross misconduct.
The Metropolitan Washington Board of Trade, the city's leading employer organization wanted to bar unwarranted and are paid entirely from taxes imposed on employers.
The board sought the restrictions as its price for supporting a new $15 million a year surtax on payrolls, designed to replay the $66 million Treasury loan.
If the restrictions on benefits were enacted, the loan would be paid by 1982, officials estimated. William V. Wilkerson, executive director of the D.C. Unemployment Compensation Board, said that without the restrictions, at least two years would elapse berfore repayment is completed with proceeds from the new surtax.
The council's action Tuesday night was preliminary. The measure will be presented of a final vote May 2.
John R. Tydings, executive vice president for the Board of Trade, said "we're very supset by what the council did." He said the issue had been "badly's distorted by the rhetoric" voiced by council members.
Tyding said the trade group wanted the restrictions enforced "so the fund will be solvent for deserving employes." He added that a board committee will meet next week to decide its position on final passage of the bill.
Organized labor and the Board of Trade seemed close to agreement on the restriction in February, when the measure was approved by the council's committee on employment and economic development, headed by Wilhelmina Rolark (D-Ward 8).
Such restrictions are in force in 25 states, including Maryland and Virginia.
However, organized labor, led by Local 25 of the Hotel and Restaurant Workers Union, took a militant stand in oppostion, contending the restrictions would give employers a punitive weapon against workers. The union conducted intensive lobbying and packed both the council chamber and the hallway outside the chamber at Tuesday evening's meeting.
Rolark, saying she had a change of heart, attempted to postpone consideration of the bill, provoking catcalls from union members anxious to see the restrictions killed outright. Marion Barry (D-At Large) objected to the postponement, forcing immediate action.
Douglas E. Moore (D-At Large) moved to eliminate the restriction against those who quit jobs without good reason. The motion was approved, 10 to 2, with Polly Shackleton (D-Ward 3) and John A. Wilson (D-Ward 2) in opposition.
Moore's second motion, to eliminate the restriction on payments to those fired for gross misconduct, was approved 8 to 4, with Barry, Shakleton, Arrington Dixon (D-Ward 4) and Willie J. Hardy (R-At Large) was absent.
With the restrictions tentatively removed, the bill now is substantially the same as it was proposed last year by Mayor Walter E. Washington, who is expected to announce his candidacy for reelection soon.
The mayor's operatives took no apparent role in the council's maneuvering. But the night after the council voted, the mayor appeared before a membership meeting of the Hotel and Restaurant Workers Union and praised the decision.