March 31, 2009
Senate committee passes unemployment insurance reform

You'd think, after all the high-profile squabbling over stimulus funds for the unemployment insurance trust fund, that the news of SB1569's advancement in the Senate might get a bit more notice than this, but apparently not. The only other story I could find was this from the Tyler Telegraph:

A Senate bill authored by a local legislator that would place provisions for Texas to accept $555 million in federal stimulus funding passed unanimously out of committee Monday.

Sen. Kevin Eltife, R-Tyler, authored Senate Bill 1569 in the hopes that the state would accept hundreds of millions of dollars from the federal government and avoid "strings" attached to the funding. The bill passed from the Senate Committee on Economic Development and is the first Unemployment Insurance Modernization legislation to pass out of a House or Senate committee.

The bill would place provisions to allow the state to accept the stimulus dollars for Texas' Unemployment Insurance Trust Fund.

"I am pleased to keep the bill moving forward," Eltife said. "I will continue to refine the legislation so that Texas can be eligible for the $555 million in federal stimulus money for the Unemployment Trust Fund. This will help many of our fellow Texans who are out of work while at the same time keeping the burden on business to a minimum."


Eltife said with the provisions the state can accept the money and avoid future burdens.

The Statesman's Virtual Capitol has a little more on what that means.

[Eltife's] plan no longer includes a sunset provision, which is barred by the federal legislation, but calls for a review of the changes after they are put into law. Gov. Rick Perry remains opposed. It will be interesting to see whether Eltife can round up enough Republicans to bring this measure up, which would be a direct challenge to Perry. Chairman Joe Deshotel will have similar legislation in his Business and Industry Committee on Wednesday, according to the Statesman's Kate Alexander.

I think this measure can and probably will pass both chambers, though it certainly could fail in the Senate. Passing it with enough votes and with sufficient time to override a veto, that's a much steeper hill to climb. Maybe it would be useful to remind the Lege that they have smacked Governor Perry before, and can do it again.

As far as the attempts to come up with a sunset provision that isn't really a sunset provision, if that's what it takes to pass this, then that's fine by me. I think it's a bit ridiculous to have to go over such hurdles, given that the marginal cost to the state some number of years down the line for expanding its unemployment insurance program and collecting that $555 million in stimulus money today is tiny compared to the overall budget - something like 0.2% of state revenues - and the marginal benefits are substantial, as Ray Perryman has estimated that every $1 from these unemployment benefits would add $2.66 to the economy. That doesn't even take into account the hit that businesses will take when the unemployment tax gets hiked in the coming months to keep the unemployment trust fund from going dry. All this, and we help a lot more people make it through some hard times intact. Point being, this is a good deal regardless of whether or not we think we might need to repeal it later. I mean, I understand the politics of this. I just don't understand the logic.

UPDATE: Typically, Bill Hammond of the Texas Association of Business opposed this bill, defying all logic and (given the provisions in the bill making it easier for victims of domestic abuse to claim the benefits) compassion. Burka summarizes a debate among three lawmakers over the stimulus funding for UI.

Posted by Charles Kuffner on March 31, 2009 to Budget ballyhoo
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