A coalition of Virginia's business groups suffered a major defeat today when the House of Delegates, dividing along partisan lines, killed a bill that would have made jobless workers wait a week before they collect unemployment benefits.
The bill, targeted as a top legislative priority of the state Chamber of Commerce, the Retail Merchants Association and the Virginia Manufacturers Association, would have saved the state's recession-racked unemployment trust fund--supported solely by employers and now $61.3 million in debt--an estimated $17 million a year.
Organized labor, rarely a powerful political force in this right-to-work state, lobbied hard to kill the proposal its supporters denounced as unfair to workers at a time when Virginia has been hit by a record 8.4 percent jobless rate. "I don't think this any more fair than the proposal President Reagan made last Thanksgiving to tax unemployment benefits," said Julian Carper, executive director of the state AFL-CIO.
The bill's defeat on a 58-to-37 vote, with Republicans almost solidly in support of the measure, was labeled by one business lobbyist "as the most antibusiness reaction I've seen in a long time." Supporters said the bill would have helped those unable to find new jobs by maintaining the current 26 weeks of benefits but paying them out over a 27-week period.
"Fifty-eight legislators just said: 'No, we don't want to save $17 million--to hell with business,' " said Charles Stebbins, director of management-labor relations at the state Chamber of Commerce. "Here they had a golden opportunity and they missed it."
"Very definitely, what you are looking at is the result of an election year," said Sumpter Priddy, lobbyist for the retail merchants, noting that the entire legislature will be up for election this November.
Two years ago, Virginia abolished the one-week waiting period on unemployment benefits as part of an overhaul of the unemployment trust fund.
Other states have also abolished the waiting period, although business lobbyists note that Ohio and Louisiana have recently moved to delay benefits in order to keep their unemployment funds solvent.
In an impassioned speech against the unemployment bill today, Del. Robert Washington (D-Norfolk) called the measure a "harpoon in the backs of the unemployed.
"Because of paper work the first check doesn't arrive for almost three weeks after an individual has lost his job even though the bills are still coming in," Washington said.
House Majority Leader Thomas W. Moss Jr. (D-Norfolk), who also opposed the bill, reminded the Democratic-controlled House that President Reagan "gave some of the largest corporations in the country the biggest tax breaks in the history of this nation."
Del. W. Tayloe Murphy Jr. (D-Westmoreland), who sponsored the bill, said the measure would aid Virginia's small businessmen, "many of whom are on the brink of bankruptcy."
According to estimates from the state Employment Commission, more than 157,534 people, collecting an average of $110.38 a week, would have been denied the first week's check next year under the bill. The commission said the measure would have allowed 58,266 to collect the extra week's check during the coming year. Proponents argued that the change would cause little hardship since many unemployed workers find work within a month of being laid off.
Labor groups maintained that any change in unemployment eligibility would break faith with an agreement on the future of the trust fund negotiated by labor and business in 1981 and approved by the legislature.
It was under that agreement that Virginia first started paying first week unemployment benefits in January 1982. At that time, only a dozen states provided benefits during the first week of unemployment.
A spokesman for Gov. Charles S. Robb said the administration had opposed any change in the unemployment system, noting that by postponing a week's benefits, the Murphy bill would penalize those actively seeking work.
Business groups cited the unprecedented strain on Virginia's unemployment trust fund, which this year for the first time in its history had to borrow cash from the federal government to stay solvent. As the recession deepened, payments from the fund soared--from $168.5 million in 1981 to $245 million last year.
More than half the states are now borrowing from the federal government to keep pace with unemployment. However, according to a spokesman for the Virginia Employment Commission, the state expects to be able to repay its $61.3 million cash advance by September.
In other action today the House approved by voice vote resolutions calling for a "mutually verifiable nuclear freeze" and a ban on holding official legislative functions at discriminatory clubs. Both were sponsored by Del. Bernard S. Cohen (D-Alexandria).
The nuclear arms freeze drew criticism from House Minority Leader Vincent F. Callahan (R-Fairfax) who said the House was "out of our element."
"I couldn't have done this three years ago," Cohen said after both his resolutions passed. "This place is changing."