The unemployment stimulus

Gov. Rick Perry:

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he Texas economy is the strongest in the nation. Our unemployment rate is 2 percent lower than the national average, and employers continue to relocate and expand in Texas.

However, I am fully aware that because of the national recession, too many Texans are out of work or uncertain about their economic future. That's why I, state lawmakers and leaders at the Texas Workforce Commission have worked hard to keep our unemployment trust fund sound, adequately funded and safe from the meddling of Congress, the Obama administration and federal bureaucrats.

Recent weeks have seen a flurry of news stories regarding unemployment benefits in Texas. Taken as a whole, they have painted a confusing and incomplete picture of unemployment insurance in our state. Here are the facts:

Texas unemployment benefits are safe. Unemployed Texans are and will continue to be covered thanks to a combination of additional contributions from Texas businesses in the form of unemployment taxes, bond financing and borrowing of federal funds. As in previous recession years, these tools will be used to keep the trust fund financed.

Texas employers know that state officials work to keep UI taxes low to encourage job creation. But when the need arises, businesses are required to pay more into the unemployment compensation system. Borrowing from the federal unemployment fund — which employers pay taxes to maintain — is also routine. Texas borrowed such funds during the 2003 national recession and in prior economic downturns. At least 15 other states are doing or preparing to implement similar federal borrowing.

We are also utilizing some “no-strings” funding available in the federal stimulus package. This allows Texas to provide an additional $25 per week in benefits to qualified unemployed Texans, resulting in an additional $161 million for the program and weeks of extended benefits for Texas workers.

I did reject $555 million in federal stimulus dollars that would have mandated the state of Texas to pay costlier benefits and put higher taxes on Texas employers indefinitely. Even if we had accepted these stimulus funds, Texas would have still seen higher unemployment taxes, bond financing and federal borrowing to keep benefits from the UI Trust Fund flowing.

But in return for less than seven weeks of unemployment benefits, this $555 million stimulus payment would have required Texas to permanently expand its unemployment program and burden Texas job creators with higher taxes for the long haul. Those stimulus dollars would have done more harm than good for Texas workers, employers and taxpayers, which is precisely why the Texas Association of Business and National Federation of Independent Business urged and supported my decision to reject the federal unemployment stimulus funds.

If Washington really wanted to help Texans, they would have sent us this money without strings attached like the Bush administration did in 2002.

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I think as long as the system is working, rejecting the strings attached funds will not be an issue for most voters. I do think that most Texans are concerned about control freaks in Washington dictating how the state operates is business. Since Texas is doing so much better than the rest of the country, they should be looking this way for examples. The best way to deal with unemployment is to foster a climate that creates jobs. That is something Texas has excelled at in recent years.

The recent increase in the minimum wage is another job killer program from Washington that will fall heavily on minorities and teenagers. It is something else we have to overcome while in a recession.

Piling on a new payroll tax for small business that does not provide health care insurance will only add to the unemployment stimulus from Washington.