AUSTIN, Texas (AP) — Gov. Rick Perry stood firm Wednesday in his position that Texas shouldn't accept $555 million in federal economic stimulus money for expanded unemployment benefits, even though some fellow Republicans are pushing to take the cash.
The Senate voted this week to accept the federal money and expand state unemployment coverage to include people seeking part-time work and those who leave their jobs for compelling reasons, such as a child's illness or family violence. The proposal by Sen. Kevin Eltife, a Tyler Republican, now goes to the House.
Perry, an outspoken critic of the federal stimulus package, contends that once the federal money runs out Texas would be left paying the cost of the expansion to the tune of $75 million a year through taxes on employers. He wasn't specific on when he believes that cost would kick in, but said it would be "in those out years."
"I disagree with the premise of the (Senate) legislation, and I think as we go over to the House I hope we have the opportunity to explain to Texans that this piece of legislation, although it may look kindly on the front end, that long term it costs Texas businesses $75 million every year for perpetuity, best I can tell," Perry told reporters after speaking to a Texas Workforce Commission community college conference.
Once government entitlement programs are put in place, it's difficult to cut them, he said.
Perry has accepted most of the $17 billion in economic stimulus money slated for Texas, but he said the $555 million in unemployment money comes with strings attached. He's made his rejection of that money a linchpin in his loud criticism of Washington.
Perry said he doesn't want to hurt the job creation climate in Texas, which he says includes low taxes, limits on civil lawsuits and a skilled workforce.
"This isn't rocket science. You raise taxes on businesses, they will go find a more comfortable place, a place with lower taxes. I just don't want to put Texas in a high tax situation," he said.
Taxes on employers are expected to go up even if the unemployment stimulus money isn't tapped. The state's unemployment insurance trust fund is rapidly being drained. It has been projected to have only $48 million, or $812 million less than it should, by October, triggering a higher tax on employers.
As is his custom, the governor wouldn't say he would veto the Eltife unemployment legislation if it reaches his desk.
"I don't make too many comments about a piece of legislation that's going to be changed as much as this one's going to change," Perry said. The 140-day legislative session ends June 1.
In his speech at the community college conference, Perry noted he is proposing increasing the state allocation to the Skills Development Fund, a worker training account, from $50 million in the current two-year budget cycle to $60 million in the coming one.
Some unemployment stimulus money is making it to Texas — $150 million given to workforce boards for job training around the state.
Local News
April 23, 2009
Perry stands firm on unemployment money
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