Democrats criticize Perry for nixing jobless aid
Dems say federal jobless aid could have boosted empty trust fund, spared employers deficit tax
By April Castro, Associated Press Writer
On Friday July 17, 2009, 6:05 pm EDT
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AUSTIN, Texas (AP) -- Democrats said Friday that Republican Gov. Rick Perry played politics at the expense of Texas employers when he rejected $550 million in federal stimulus help for the state's soon-to-be insolvent unemployment insurance trust fund.
The fund is expected to run out of money next week and Texas will borrow at least $643 million from the federal government to cover unemployment claims. The deficit means Texas businesses will have to make up the difference next year with an unemployment deficit tax of up to 2 percent to replenish the fund.
The fund could have gotten a $550 million boost from the federal economic recovery act, easing next year's deficit tax on employers, but Perry rejected the money. He said it had too many strings attached because it required changes to eligibility guidelines.
Perry's office did not immediately return a call from The Associated Press on Friday.
"The rank hypocrisy about this is just so transparent and the fact is, it's hurting small businesses in Texas disproportionate to other states that are taking the money," Texas House Democratic Leader Jim Dunnam said on a conference call. "It puts us at a competitive disadvantage."
The move is "political posturing, not necessarily what's best for the state," National Democratic Committee spokesman Hari Sevugan said of Perry, who faces a tough primary next year against U.S. Sen. Kay Bailey Hutchison.
The Texas Workforce Commission announced earlier this week that it will have to take out interest-free loans from the Department of Labor to keep paying unemployment benefits through Oct. 1. The announcement had been expected, but came earlier than projected because of higher-than-expected Texas unemployment numbers.
"It's frustrating that we worked hard to get stimulus money for the state of Texas and the $550 million that would have been available with minor changes in the law," said U.S. Rep. Gene Green, D-Houston. "This is not the first loan that will have to be made ... this could have been handled with a governor who is more sensitive to the unemployment and even to the taxpayers' dollar and the employers' dollar."
During this year's legislative session, Perry won the battle with lawmakers to reject the federal economic stimulus money for unemployment, even though the state accepted almost $17 billion from the recovery act. Perry said the unemployment money would force an expansion of Texas' unemployment system and require the state to pay the tab later on.
Dunnam said it's not too late to accept the money: Perry could call lawmakers back for short special session.
"The votes are there to pass this," he said. "It already passed the Senate, they prevented us from having a vote on the House floor, but the votes are there to pass this and we could do it in 2-3 days."
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