Perry Rejects Stimulus Funds for Unemployment

Gov. Rick Perry, speaking in Houston, announced less than an hour ago that he will reject federal stimulus money to shore up the state's unemployment insurance program. This comes despite a warning from Texas Workforce Commission Chairman Tom Pauken that the UI fund could begin running a deficit this fall, possibly followed by insolvency.

“Texans who hire Texans drive our state’s economic engine," Perry said. "During these tough times, Texas employers are working harder than ever to move products to market, make payroll and create jobs. The last thing they need is government burdening them with higher taxes and expanded obligations. I am here today to stand with Texas employers and the millions of Texans they employ to resist further government intrusion into their businesses through an expansion of our state’s unemployment insurance program.”

In a press release, Perry's office wrote:

Strings attached to the unemployment insurance stimulus dollars would require an unprecedented change in Texas’ definition of unemployment, increasing the tax burden borne by Texas employers. This increased burden would counteract 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.

Reportedly, Perry is scheduled to be on Fox News within the hour.

Reactions from various politicians and interest groups after the jump.

Reactions

Sen. Leticia Van de Putte, D-San Antonio, via Twitter

I am amazed that Governor Perry would put partisan interests above the needs of hurting Texas families

Sen. Kirk Watson, D-Austin

Refusing this money is not merely short-sighted or economically questionable – it demonstrates the height of denial about the challenges confronting this state and its people. Texans, through their taxes, will still be responsible for every dollar that the federal government wants to send back to this state. … It's now incumbent on the Legislature to address this issue directly and stand up for the workers, families, and businesses who are being buffeted by this recession.

Texans for Fiscal Responsibility

Governor Perry has done the right thing for employers and employees, and Texas’ economy, by rejecting the mandate-heavy UI portion of the federal stimulus package. … Texas taxpayers don’t want, and cannot afford, to have Barack Obama, Nancy Pelosi and Harry Reid turning the Lone Star State into California or Illinois.

National Federation of Independent Business

NFIB/Texas salutes Governor Perry for rejecting these federal mandates. … NFIB/Texas remains strong in our position today against creating programs with federal stimulus dollars that will require funding after the stimulus money is gone. We believe stimulus funds should be used for one-time expenditures that will not require long-term commitments when the money has run out.

Texas AFL-CIO

Today Gov. Rick Perry said to the workers and employers of Texas: "What crisis?" … Playing 2010 or 2012 politics when Texans are suffering in 2009 has nothing to do with good public policy. … If today’s decision stands, employers will start paying an additional $555 million in taxes in January, courtesy of the governor, and Texas workers who desperately need help will be left to fend for themselves.”