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Unemployment services face cutbacks due to money crunch

Incorrect projections of the nation's unemployment rate and budget cuts have left federal unemployment insurance programs $124-million short of the demand for fiscal 1990, a miscalculation that a labor advocate says will cripple the system. A coalition of labor unions and commerce and legislative associations warned congressional staffers Wednesday of the repercussions of the current unemployment rate, which they said is 0.3 percent higher than expected.

According to the coalition, the average state's budget will fall short 6.7 percent of its demand, but at least two states _ Nebraska and Washington _ will be short more than 10 percent.

Although Florida's 6.3 percent shortage is about average among state shortfalls, the amount of unemployment benefits paid by the state rose sharply between 1988 and 1989, according to one lobbyist.

"Florida experienced a 19.7 percent increase in unemployment claims that were paid _ from 633,000 to 758,000 _ between 1988 and 1989," said Ned McCulloch, spokesman for the Service Employees International Union.

"It's just part of a national trend," he said. "And yet funding for running these (unemployment) offices was cut and now there just aren't enough people to run these offices."

About $24-million of the $124-million shortfall is due to budget cuts mandated under the Gramm-Rudman-Hollings Act. A total of $1.49-billion has been budgeted for the federal unemployment insurance program in fiscal 1990.

McCulloch said that taxes collected by the state and federal governments for unemployment insurance are earmarked for unemployment benefits and administering the offices, respectively.

"The benefits won't change," he said, "but the quality of service will."

He said the shortfall would cause cutbacks, layoffs and long lines across the nation.

Twenty-three House members have sent a letter to House Appropriations Committee Chairman Jamie L. Whitten, D-Miss., calling for his panel to "consider a supplemental appropriation to cover the glaring national shortfall in administrative funds."

But according to an administrative assistant of a House appropriations subcommittee, where initial action would have to be taken, a supplemental appropriation is not likely because it would put this year's budget in a deficit.

"I wouldn't say there is a good chance," said Bob Knisely, a subcommittee aide.

"The administration has taken the position that there will be no supplements other than for Panama," he said. "They're opposed to it unless we can find $100-million in some other program and take it out. The only other way is for Congress to waive the budget ceilings."