Unemployment compensation and dislocated worker programs will run out of money - leaving thousands of laidoff workers without assistance - unless the Legislature acts, lawmakers were told Wednesday.

In addition, the high cost of health care is a significant problem that must be addressed, workers testified at a state Senate committee.

'To me right now, it's not so much the money I make per hour, it's the health insurance for my kids,' former Northwest Airlines employee Berilynn Corcoran said.

Corcoran, an office worker, was laid off Sept. 24 in the wave of cuts following the Sept. 11^th terrorist attacks. She was able to find another job that pays about a dollar an hour less, but she faces huge health care premiums. Her family coverage, which was fully paid at Northwest, now costs her $480 a month, an amount she simply cannot afford on take-home pay of about $1,000 a month, she said.

Under current law, Corcoran must wait four months to be eligible for MinnesotaCare, the state-run health insurance program. Members of the state Senate Jobs, Housing and Community Development Committee said they may consider legislation to waive the waiting period for workers who lost their jobs because of Sept. 11.

Major shortfalls
But addressing the needs of laidoff workers will be challenging as the state faces an estimated $2 billion budget deficit. The unemployment insurance fund will run out of money by early next year, while the Dislocated Worker Program is almost tapped out already, lawmakers were told.

Both programs are funded by payroll taxes on employers. An assessment on employers will eventually bring the unemployment fund up to the needed levels, but a delay in the way the assessment is triggered could lead to the state having to borrow money from the federal government and potentially paying millions of dollars in interest.

The Dislocated Worker Fund, which once was flush with money, was depleted as the administrations of both Governors Arne Carlson and Jesse Ventura diverted millions of dollars into other programs. In addition, the Legislature cut the payroll tax for employers last year, further reducing the amount collected.

In fiscal year 2001, 18,500 people who lost their jobs in mass layoffs were helped through the Dislocated Worker Program, which provides money for retraining, counseling and other assistance, said Rebecca Yanisch, commissioner of the Department of Trade and Economic Development, which oversees the program. That number was a record, she said.

In the first five months of fiscal year 2002, the program already has served 14,500 people and by the end of the year will probably double the number helped in 2001, she said. Yet only about $4 million - enough to serve about 1,250 people - remains in the Dislocated Worker fund, Yanisch said.

No proposals from governor
Among the options legislators may consider is transferring money from other state programs into the Dislocated Worker fund, reinstating the payroll tax to the pre-2001 level of one-tenth of one percent to replenish the fund or borrowing to fill the need.

Committee Chair Ellen Anderson, DFL-St. Paul, said the committee is under a one-week deadline to make recommendations and that the entire Legislature is under pressure to act. Lawmakers are concerned about the recession and huge layoffs such as those that have occurred at LTV, Northwest Airlines and Fingerhut, she said.

Legislators are taking seriously Gov. Ventura's admonition to act very quickly on budget issues, she said, and expressed dismay that none of the commissioners or other administration representatives at the hearing brought any proposals for addressing the unemployment insurance, Dislocated Worker and health care issues.

'I'm just stunned that the same administration that is telling us to get this job done in a week, has no ideas or recommendations on how to solve these problems,' she said.

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