By the way, the money that the state has in reserve for unemployment insurance is rapidly being depleted. Just so you know.
[Tuesday], the Texas Workforce Commission announced that the unemployment trust fund is now expected to be almost depleted by October. The commission issues monthly projections and each has been gloomier than the last. By law, the trust fund must stay above $858 million at the beginning of the fiscal year in October. At the current rate, the fund will be $812 million below the floor, commission executive director Larry Temple told the House special stimulus committee yesterday.
And a $812 million deficit means somebody's gotta pay - and that somebody, according to Temple, will be Texas employers.
Temple said the fund can raise money to pay unemployment benefits in three ways: 1) By borrowing from the feds (and paying interest on the loans) 2) By issuing bonds (also involves paying interest) and 3) By raising taxes on employers. He said the commission's strategy would probably involve a combination of the three.
However, combo or no combo, even if TWC borrows from the feds or floats bonds, the employers will be the ones funding the debt.
Dunnam made this clear when he asked Temple, "Do any of [the scenarios] involve anyone other than employers paying for the deficit?"
Temple responded, "No."
Here's where the stimulus comes in: Don Baylor, a senior policy analyst at the Center for Public Policy Priorities, said if Texas changes its eligibility statute and accepts the stimulus funds, employers will still have to pay an additional $294 million in 2010 to make up for the deficit. But without the federal funds, employers will pay an additional $935 million to make up for the deficit in 2010.
[Hammond] presented a bold proposal to "save" $630 million a year in unemployment benefits payouts, which included measures such as greatly restricting or eliminating benefits for people who receive severance pay. He also said the commission didn't do enough to ensure people are looking for work while they're receiving benefits: "The commission is allowing [unemployed] people to sit on their laurels."
Well, I suppose it's all academic, since Governor Perry has now officially rejected the unemployment insurance funds. Hope all you business owners that will see your taxes go up more than they needed to will appreciate that. Perry made the announcement right here in Houston, which is somewhat ironic.
Houston's growth advantage over the rest of the nation during the past five years--oil and natural gas--has not only evaporated in the face of a global commodity bust but has turned into a definite liability. The coming year will see significant job losses in Houston, led by the energy sector.
Texas AFL-CIO President Becky Moeller today issued this statement in reaction to Gov. Rick Perry's announcement that he opposes acceptance of $555 million in federal economic stimulus funds for jobless workers in Texas:
"Today Gov. Rick Perry said to the workers and employers of Texas: 'What crisis?' The governor's decision to reject $555 million in federal unemployment insurance funds available in the economic stimulus package amounts to a callous statement to tens of thousands of Texans who are losing their livelihoods that Texas does not have their backs."
"Playing 2010 or 2012 politics when Texans are suffering in 2009 has nothing to do with good public policy. The Texas AFL-CIO has worked with lawmakers who are carefully exploring the ramifications of accepting the UI funds. The stimulus package essentially covers for seven years any cost associated with making UI benefits more accessible to workers who have lost jobs through no fault of their own. If today's decision stands, employers will start paying an additional $555 million in taxes in January, courtesy of the governor, and Texas workers who desperately need help will be left to fend for themselves."
"In short-circuiting the legislative process, Gov. Perry is telling employers that it is better to pay $555 million extra to keep the current lousy UI system than to pay an incremental increase seven years from now for a better system."
"Here's hoping the Legislature sees this issue differently. This is no time to demonize workers who are victims of the worst economy America has seen since the Great Depression."