House Committee Recommends Legislature Overturn Perry’s Rejection Of Unemployment Stimulus Funds

In a 5-1 vote yesterday, the House Select Committee on Federal Economic Stabilization Funding passed a motion recommending that the Texas Legislature take actions necessary to ensure that all funds from the American Recovery and Reinvestment Act related to unemployment insurance are received by the state.

Texas Governor Rick Perry announced earlier in the day that he was “rejecting” the unemployment funds from the stimulus package.

The motion, authored by State Rep. Garnet F. Coleman (D-Houston), passed with the support of only Republican, State Rep. Jim Pitts (R-Waxahachie), chair of the House Committee on Appropriations. Another Republican, Rep. Myra Crownover (R-Denton), the Committee’s vice chair, tried to delay and cast a pall over the important and necessary action:

House Appropriations Chairman Jim Pitts was the only Republican among the “ayes.” Rep. Myra Crownover, R-Denton, voted against the measure and argued that action should be delayed.

Crownover returned after a recess of the committee to say she was disappointed the vote was rushed. Two other members of the committee were in the building and under the impression no action would be taken today, she said.

Coleman had this to say about his motion:

The Select Committee on Federal Economic Stabilization Funding has taken testimony, received evidence, and gathered information pursuant to its charge by the Speaker of the House. The Select Committee has found that since the beginning of the economic downturn, over 250,000 Texans have lost their jobs. By September 2009, the state’s Unemployment Compensation Trust Fund will have a deficit of at least $800 million, triggering the implementation of a deficit tax on Texas employers. This deficit tax will likely double the overall unemployment tax burden on the average Texas employer.

Texas law already complies with a portion of the criteria needed to receive the full $555 million from the Recovery Act. To receive the funds, the Legislature must make three modifications to existing law:

*Alter the base period calculation for unemployment.
*Alter the compelling reasons criteria for a qualifying job loss.
*Alter either the training or the part-time worker provisions of Texas law.

[...]

Tom Pauken, Chairman of the Texas Workforce Commission, has already indicated that he will work on legislation with Representative Tan Parker and Representative Joe Deshotel that will take the action necessary to draw down federal funds that Texas employers have paid in to, and to prevent an unnecessary increase in deficit taxes.

The Select Committee weren’t the only ones reacting to Perry’s actions today. U.S. Senator Kay Bailey Hutchison issued a fairly weak response showing support for small business but ignoring everyday Texans:

I hope that the Governor has carefully thought through the potential outcomes of today’s decision. With the state unemployment fund dangerously close to falling below the legal threshold, it is imperative that the Governor does nothing that potentially burdens small businesses with higher taxes in tough economic times or pushes those who have recently become unemployed and their families into further economic peril.