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« Church Folk and Generosity | Main | The Truth About Health Care Reform »


Texas and Unemployment Insurance

By Gerald Britt
June 10, 2009

It's been a little hard to follow, but evidently some part of the federal stimulus will be used to increase unemployment benefits for Texans. According to the Dallas Business Journal,

The Texas Workforce Commission said Monday that the agency has distributed more than $100 million worth of additional unemployment benefits via stimulus funding from the American Recovery and Reinvestment Act that went into effect in February. The stimulus plan furnished an additional $25 per week to qualified job seekers as they work to find permanent employment. "Eligible Texans began receiving the benefit increase in mid-March. The increase is effective for all initial claims filed through Dec. 26, 2009.
Evidently the legislature recognized, that even $25 a week helps a unemployed worker...

Back in April at least one Republican senator had figured out the long term benefits of the stimulus,

Senators voted 22-9 in favor of a bill by Sen. Kevin Eltife, R-Tyler, that would authorize state officials to receive the stimulus money to shore up Texas' trust fund for unemployed workers...

Eltife told senators that the state will benefit for several years if it agrees to accept the federal aid despite what critics say. In addition, required changes – such as an anti-fraud provision – are likely to result in long-term savings for employers, he predicted.

"I want to make this point very clear: The stimulus money will help fund these changes for over nine years. That is nine years of helping fellow Texans who lose their jobs in these tough economic times," he said.

"I know there are concerns that once these changes are made, they could become permanent. But in this bill we would create a task force ... that would study and make recommendations to the workforce commission as to whether continuation of the changes is warranted."

He also figured out that the stimulus would help Texas businesses,
Eltife said the balance of the unemployment trust fund will dip to $19 million by October at its current rate of payments – $839 million below the minimum level.

That means the Texas Workforce Commission will have to borrow $2 billion next year to handle claims and shore up the fund.

Acceptance of the stimulus funds will lower the amount needed to $1.5 billion, according to Eltife, who noted that will reduce the amount businesses are required to pay into the fund.

"It will lessen the burden on businesses significantly," he said.

Evidently this wisdom didn't prevail. Perry’s office defended the governor’s actions.
"Governor Perry believes the best way to address unemployment is to create new jobs, rather than discouraging job creation by raising taxes on employers through federal mandates tied to stimulus dollars,” Perry spokeswoman Katherine Cesinger said. “Texans who lose their job through no fault of their own are covered and will remain covered under the current unemployment insurance system in our state.”

"Perry has accepted $16.5 billion from the stimulus package. But he rejected $555 million for unemployment insurance, saying it would require the state to expand coverage to qualify for the additional federal funds and then face additional costs once federal assistance stopped."

"Texas’ state legislators tried and failed to expand unemployment coverage under state law to qualify for the funds that Perry rejected."

Texas' unemployment rate at 6.7% is considerably lower than the nation's at 9.4%, but try consoling the 800,000 plus Texans who won't be going to work tomorrow.

And while you're at it, try convincing them that the Governor's decision is better for them in the long run.

I think they'll consider that a bit of a stretch. What do you think?


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