Foundation praises Gov. Perry’s decision to decline stimulus funds

AUSTIN – The Texas Public Policy Foundation praised Gov. Rick Perry’s announcement today that he would formally reject the $555 million offered by the federal government in exchange for Texas loosening its eligibility requirements and increasing payments for unemployment benefits.

“Legislators must keep in mind that every additional dollar that Texas employers have to pay for people who aren’t working is one less dollar available for job creation and economic recovery,” said Talmadge Heflin, Director of the Foundation’s Center for Fiscal Policy. “We are glad that Gov. Perry has chosen to keep our state’s focus on those goals, as they are the best path forward for the people of Texas.”

Heflin debunked the popular misconception that the federal funds would cover the cost of these changes for the next several years.

“Employers will likely see an increase in their unemployment taxes even if we were to accept these funds to shore up our unemployment trust fund balance,” Heflin said. “The issue is whether Texas employers should continue to pay these higher unemployment taxes long after our economy has recovered. We agree with Gov. Perry that they should not.”

According to estimates presented Monday by the Texas Workforce Commission, the five-year cost to Texas employers of changing the alternative base period – the pre-requisite for receiving any of the federal unemployment insurance funds – would be more than $212 million. The five-year cost to Texas employers of imposing the other federally mandated changes range from $23 million for the “quit-to-move” and “quit-for-family-reasons” eligibility expansion to $1.43 billion for the dependent allowance benefits.

The Honorable Talmadge Heflin is Director of the Center for Fiscal Policy at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. Heflin served 11 terms in the Texas House of Representatives and chaired the House Appropriations Committee in 2003, leading the Texas Legislature’s successful efforts to close a $10 billion budget deficit without a tax increase.

The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin. More information can be found on the Foundation’s website, www.TexasPolicy.com.

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