Perry rejects fed unemployment funds

HOUSTON (AP/KXAN) - Texas Gov. Rick Perry rejects federal stimulus money that would fund unemployment benefits, saying they would require the state to increase the tax burden on Texas businesses to fund an expanded program. The $555 million in federal stimulus money would expand state unemployment benefits.

Though Perry accepted most of the roughly $17 billion slated for Texas in the plan, he has been an outspoken critic of President Barack Obama's $787 billion stimulus bill. Perry said Texans who hire Texans drive the state’s economic engine, saying Texas employers are working harder than ever to move products to market, make payroll and create jobs during these tough times.

"The last thing they need is government burdening them with higher taxes and expanded obligations,” said Perry.

Perry stood Thursday with Texas employers and the millions of Texans they employ, in an effort he said was to resist further government intrusion into their businesses through an expansion of the state’s unemployment insurance program.

Perry cites strings attached to the unemployment insurance stimulus dollars would require an unprecedented change in Texas’ definition of unemployment, increasing the tax burden to Texas employers, counteracting the stimulus package’s objective of job creation by leading companies to limit hiring and raise prices on products, hindering their ability to overcome the economic crisis and ultimately limiting growth.

The governor reiterated that Texans eligible for unemployment insurance under the state’s current system would retain the same benefits.

“My focus has been, and continues to be, cultivating an environment that creates more jobs for Texans," said Perry. "That is why I am so concerned about the belief that has gained a foothold in our national consciousness that the best and only way to solve our nation’s problems is to drown them with taxpayer dollars.”

Representative Lloyd Doggett, the senior member of the House Ways and Means Committee responded to Perry's decision Thursday afternoon.

"[Perry's] reaction is a feeble distraction to cover the Governor's own demand for a federal bailout for the mismanaged Texas unemployment fund. It is the Governor's bailout that will result in immediate increase in taxes on Texas businesses and no help for Texans in need through no fault of their own. We get the worst of both worlds. We get a tax increase and the unemployed don't get help. Because the Governor doesn't get it, families won't get federal support while they are trying to [secure] another job."