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Senate approves stimulus funds for unemployment insurance

Good.

The Texas Senate tentatively approved Sen. Kevin Eltife’s bill to change the state’s unemployment laws so that Texas can accept an estimated $555 million in federal stimulus dollars.

[…]

Eltife’s bill was supported by 22 senators and opposed by nine. It faces a final vote before going to the House for consideration.

SB 1569
would make several changes to Texas law to drawn down the funds, including adopting unemployment insurance benefits for part-time employees and for workers forced to quit their jobs for compelling family reasons.

The record vote isn’t available yet, so I don’t know who the nine are. Sens. Deuell and Carona are listed as coauthors, so presumably they voted in favor. I guess Sen. Eltife had the numbers he needed. Kudos to him for getting this done.

Now of course, Governor Perry will surely veto this. The question is whether the House can pass it with enough votes to override, and if it can be passed in time to try to override it. Perry can sit on it for three weeks before issuing a yay or nay, so unless the House acts quickly, it’ll be a moot point. No clue when they might get to it.

A statement from the Texas AFL-CIO in praise of this vote is beneath the fold.

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Once more with the stimulus and unemployment insurance

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.

Sure does sound like taking all of the federal stimulus money available for unemployment insurance would be a good deal all around, doesn’t it? It eases the tax burden on businesses, it helps many more people, and by helping more people it has a stimulative effect on the economy. Which was the point, after all. You’d have to be a blinkered partisan zealot not to see the benefits. You know, like Bill Hammond, the president of the Texas Association of Business:

[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.”

Or we could just eliminate the idea of unemployment insurance altogether. Who cares what happens to these people that get laid off, anyway? They’re just a bunch of lazy bums who want to suck Bill Hammond’s blood. Where’s the compassion for that, I ask you?

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.

Via Texas Politics. Too bad Governor Perry won’t be joining any of these folks on the unemployment line until at least 2011, by which time one hopes the job market has improved. It’s good to be the king. A statement from Texas AFL-CIO President Becky Moeller in response is beneath the fold. BOR has more, including Kay Bailey Hutchison’s timid response.

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Will we or won’t we fix unemployment insurance?

There’s a lot of money riding on the answer to that question.

The lure of $555 million in federal stimulus money for additional unemployment insurance has Texas legislators mulling whether to expand unemployment benefits to more workers.

To get that money, Texas would have to implement some key changes to state law — including modifying some eligibility requirements to include tens of thousands of low-wage workers. Such changes have been considered but not enacted in previous sessions.

[…]

Gov. Rick Perry is reviewing the American Recovery and Reinvestment Act signed by President Barack Obama this month and the strings attached to all the money, a spokeswoman said.

The unemployment money would be the mostly likely candidate if Perry were to reject anything from the stimulus package.

Perry has said the stimulus money should be used only for one-time projects, not ongoing expenses.

“The hardest thing to remove from government is a temporary program,” Ken Armbrister, Perry’s legislative director, said at a Wednesday hearing.

[…]

The federal money could lessen the need for new taxes on business, said state Rep. Mark Strama, D-Austin, who is chairman of the Technology, Economic Development and Workforce Committee.

“Failure to adopt the policy changes … would result in a higher burden on business taxpayers in the immediate and near term during the recession” than would expanding the benefits, Strama said.

I can understand the reluctance to taking one-time money for potentially ongoing expenditures. But sometimes these are things you should have been doing anyway, and will at worst take on a relatively small expense while getting a worthwhile return on it. A little more analysis and a little less sloganeering would go a long way here.

The Workforce Commission is still determining how much the change would cost.

But an analysis of a similar 2007 bill put the price tag at about $35 million to $45 million a year as 74,000 additional workers would become eligible for benefits, according to the Legislative Budget Board.

The number, however, would probably be somewhat higher given today’s higher unemployment rates.

That change alone would open the door to Texas receiving $185 million of the stimulus money.

The Legislature has some options for how to tap the remaining $370 million. Lawmakers would need to enact two of four policy changes, such as allowing people to get benefits while searching for part-time work.

The Center for Public Policy Priorities, which advocates for low-income Texans, estimates that all of the reforms combined would cost $55 million to $75 million a year, so the federal money could cover the costs for seven years or more.

No one knows the true cost because that would be driven by how many more people took advantage of the benefits, said Talmadge Heflin of the Texas Public Policy Foundation, which advocates for limited government.

“The upside is all short-term,” Heflin said. “The downside in future years will greatly outweigh any upside.”

Funny, you could say the exact same thing about those big property tax cuts we enacted last session when we had some extra cash lying around. I don’t recall there being a whole lot of angst from certain quarters about how we were going to pay for it going forward – there may have been something about the beauty of the free market, or the Laffer curve, or magic pixie dust, I’m not sure. You want to talk about something that’s tough to get rid of, try repealing an irresponsible tax cut. In contrast, this would cost about $150 million per biennium – likely less in the future when the economy improves and more people are working again – which is about 0.2% of the total state revenue we have for this period. It would also help a lot of people who could really use it, and would be quite economically stimulative, as the recipients would be spending all that money on frivolities like food and housing. Seems like an easy decision to make, if you ask me. Patricia Kilday Hart sums up the hearings, in which Texas Workforce Commission Chair (and former chair of the Republican Party of Texas) Tom Pauken spoke in favor of getting stimulus money, as follows:

So, to review:

1. An escalating unemployment rate means the trust fund is paying out 120 percent more than it did this time last year and

2. At current rates, the trust fund will be broke by fall and

3. Bill Hammond [of the Texas Association of Business] doesn’t want to take any federal stimulus money to fix it because somebody might have to pay higher taxes in the future.

Like I said, seems like an easy call to me. Press releases from the AFL-CIO of Texas and Senators Rodney Ellis, Eddie Lucio, Leticia Van de Putte, and Representative Joe Deshotel, who are urging Governor Perry to declare this a legislative emergency, are beneath the fold.

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Committee assignment reactions

Rather than update the earlier post, I thought I’d do a new one rounding up various reactions to the committee assignments in the House.

Matt says the Republican “Gang of 11” won big, but Democrats got little respect.

Phillip is somewhat more sanguine. He did a ton of number crunching and other analysis, and deserves more than a one-line summary, so go read what he wrote.

Grits sees some good things for criminal justice bills.

EoW sees good things for WilCo’s freshman Rep. Diana Maldonado.

Vince thinks the Dems got rolled.

Greg is happy for his Rep., Scott Hochberg.

Equality Texas is encouraged by the Speaker’s appointments.

Finally, via the Texas AFL-CIO email list, Ed Sills says Straus “appears to have done a good job of balancing an intricate web of considerations in appointing House committees”, but he takes a look at one particular committee and sees trouble:

Judiciary & Civil Jurisprudence – Todd Hunter, R-Corpus Christi, chair; Bryan Hughes, R-Mineola, vice chair; Dan Branch; Will Hartnett; Bryan Hughes; David Leibowitz; Roberto Alonzo; Jim Jackson; Tryon Lewis; Jerry Madden; Armando Martinez; and Beverly Woolley. Panel is the so-called “tort reform” movement’s ultimate dream. Hunter returns after long absence from House to chairmanship after tort reformers funded his campaign to unseat former Rep. Juan Garcia. Unbalanced 8-3 Republican makeup recalls days when Joe Nixon took dictation from anti-lawsuit crowd at Capitol. Panel consolidates two prior committees into powerhouse that would consider both civil justice and judicial selection. Something nasty could be brewing here.

Yet another thing to keep an eye on. What’s your reaction to the committee assignments?

UPDATE: And Burka weighs in, with his take on who won and who lost.

UPDATE: The TLCV gives its scorecard numbers for members of relevant committees.

UPDATE: Banjo asks if his Rep., Dennis Bonnen, is a winner or loser.