Texas governor rejects $555M of stimulus money for unemployment

Original Link: http://www.startribune.com/nation/41165322.html

Texas Gov. Rick Perry announced Thursday he turned down $555 million of federal stimulus funding that would expand the state's unemployment benefits, saying the money would have required the state to keep paying for the expanded benefits after the stimulus money ran out.

Perry, an outspoken critic of President Barack Obama's $787 billion stimulus bill, did accept most of the roughly $17 billion slated for Texas in the plan. But he turned down the unemployment benefits because he said it would require the state to increase the tax burden on Texas businesses.

"During these tough times, Texas employers are working harder than ever to move products to market, make payroll and create jobs," Perry said at a news conference. "The last thing they need is government burdening them with higher taxes and expanded obligations."

Other Republican governors have said they will turn down federal stimulus money, including Louisiana Gov. Bobby Jindal, who said he would not accept nearly $100 million to expand unemployment benefits.

Moments after Perry said he would reject the money, the House Senate Committee on Federal Economic Stabilization Funding voted 5-1 in favor of a motion encouraging the Legislature to make the necessary changes to enable the state to receive $555 million. Republican Rep. Jim Pitts, chairman of the powerful House Appropriations Committee, was among those voting in favor the motion.

Perry's announcement was immediately criticized by Democratic lawmakers and advocates for low-income residents.

"Without this federal money, Texas businesses face increased unemployment insurance taxes in bad times, and without the modest reforms in state law required to get the federal money, about 45,000 Texas workers will go without unemployment insurance," said Don Baylor, a policy analyst for the Center for Public Policy Priorities.