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Lege versus Gov on unemployment funds

Showdown time.

The House committee charged with recommending how to use the federal stimulus money does not see eye to eye with Gov. Rick Perry on the $555 million for unemployment insurance.

In a 5 to 1 vote, the committee on Thursday endorsed enacting the necessary changes to state law so that Texas would be eligible for the money. Earlier today, Perry said Texas should not take the money.

House Appropriations Chairman Jim Pitts was the only Republican among the “ayes.” Rep. Myra Crownover, R-Denton, voted against the measure and argued that action should be delayed.


Also, Pitts plans to join Rep. Tan Parker, R-Flower Mound, as a co-author of a bill that would enact the required legislative changes but allow the extended benefits to expire when the federal money is gone. Estimates indicate the federal money would cover seven years of the additional benefits.

Crownover objected to the vote being today – she says two other members of the committee were in the building but didn’t think any action was being taken. Be that as it may, she hasn’t said she’d reject the funds. And as Phil notes, Texas Workforce Commission Chair Tom Pauken will be working with Reps. Pitts and Parker to craft that legislation. It’s entirely possible to me that the Lege will vote to bypass Governor Perry. Whether they can do it in time to make a veto override attempt is another story. But the stage is set for a rebuke. This will be fun to watch.

Economist Ray Perryman, testifying before the committee, said taking the money is on balance a good deal for Texas. The federal infusion would lessen a tax increase on employers now and would cover the extended benefit for at least seven years.

He added that the unemployment tax does not affect Texas’ ability to compete for jobs. Property taxes and the business tax are much bigger considerations when businesses choose where to set down roots, Perryman said.

Perry is of course simply playing to a small audience – he has a primary to win, after all, and it must be noted that he’s got KBH on her heels right now. The kind of person Rick Perry is trying to please by taking this action is in fact pleased by it. Who cares what the rest of us think?

Here’s a copy of official motion (PDF), which lays out the case for accepting the funds, and a copy of a statement from Rep. Garnet Coleman (PDF), which notes that Texas is already mostly in compliance with the federal law for the funds. EoW, Vince and Vince again, Eileen, McBlogger, and the CPPP have more; I also have a couple of press releases, from Rep. Coleman and State Sen. Leticia Van de Putte. By the way, did you know that 32 million people are on food stamps, and one in 11 of them is in Texas? Or that Texas’ unemployment rate is now 6.4% and climbing? Just FYI. Maybe someone should inform the Governor.

UPDATE: More from Texas Impact.

State Rep. Garnet Coleman (D-Houston) criticized Governor Rick Perry for playing politics with the future of Texans by rejecting the unemployment insurance component of the stimulus package. In January alone, Texas lost 75,800 payroll jobs, bringing the total number of Texans seeking jobs to 797,000. Unemployment claims in 2009 are double what they were in 2008, and the current unemployment fund reserves are not adequate for this downturn.

“Governor Perry ran Texas into the ground by suspending the tax on business that goes to the unemployment fund,” said Representative Coleman. “That short-sided act has helped to deplete the fund by October.”

If Texas accepts the stimulus funds, Texas tax payers will have to pay an additional $294 million in 2010. However, not accepting the funds will make it likely that employers will have to pay $935 million in 2010 to make up for the deficit.

“Governor Perry will run us further into the ground if he does not accept the unemployment insurance component of the federal stimulus,” said Representative Coleman. “The Governor is costing Texas business owners close to $1 billion.”

If Texas enacts necessary changes to its unemployment laws it could receive $555.7 million to pay for unemployment benefits from the stimulus package. Texas should make the changes, expand benefits, and help our fellow Texans by accepting this money.

“Texans who have lose their jobs in this economy deserve to receive the unemployment benefits that they have paid taxes towards,” said Representative Coleman. “We should not let this money go somewhere else.”

Additionally, today after learning of the Governor’s actions, Representative Coleman authored and passed a motion in writing in the Select Committee on Federal Economic Stabilization Funding describing the committee’s findings and recommendations to Speaker Strauss.

Senator Van de Putte Statement on Governor Perry’s Refusal of Funds for Unemployed

“Governor Perry’s decision will harm many Texas families. With 26,000 Texans filing new unemployment claims each week, Texans need help now. The unemployment fund is already running low and will reach zero by October 1st,” said Van de Putte. “Why would Governor Perry place the burden on already stressed employers to make up the shortfall? I am amazed that Governor Perry would put partisan interests above the interest of already unemployed Texans and those who will unfortunately lose their jobs due to this economy.”

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