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THE GOVERNOR’S JOB CON With more and more Texans out of work, Perry rejects federal unemployment funds and panders to his right-wing base. by Dave Mann and Susan Peterson 0 n March 12, Gov. Rick Perry called a press conference at Bering’s, a family hardware and luxury household-goods store in Houston, to announce that he wanted to turn down free money. The federal government is offering $555 million in stimulus funds to help Texas pay unemployment benefits to its rapidly rising population of laid-off workers. Here was the governor, saying no thanks. Perry’s venue apparently was meant to show that the governor was siding with homegrown Texas businesses. This was his rhetoric, a classic social conservative argument: “The unemployment insurance stipulations in the new federal stimulus bill will ultimately increase the burden borne by Texas employers. The math is simple: Employers who have to pay more taxes have less money to meet their payroll, hire new employees, and grow their businesses.” In reality it’s not so simple. Rejecting the funds actually would raise taxesthough not by muchon Texas employers in the short term. It would also prevent tens of thousands of Texans from being eligible for unemployment benefits. In the long run, rejecting the funds would hurt the state’s economy. In Perry’s view, of course, the stimulus money isn’t free. To receive the $555 million, Texas must comply with the federal Unemployment Insurance Modernization Act, which requires states to make more people eligible for unemployment aid. That expansion likely would be permanent, resulting in more Texans receiving unemployment benefits in the future. And that would mean a long-term tax hike on Texas businesses, because employers pay for unemployment benefits. Perry doesn’t like thatas policy or as politics. The governor’s timing was anything but propitious. The Texas Unemployment Insurance Trust Fundwhence the benefits paid to unemployed workers flowis quickly going broke. In the last week of March, the Texas Workforce Commission, the agency administering the fund, saw 28,000 new unemployment claims and paid out $74 million in benefits. The same week in 2008, there were half as many new claims and $27 million in payouts. With claims rising fast, Texas’ fund essentially is insolvent. The Workforce Commission projects the balance will dwindle to $19 million by Oct. 1. That’s $840 million below the fund’s legally required minimum. So when Perry announced his desire to deny this bankrupt system $555 million from the feds, a political squall ensued. Criticism came from all quarters. Members of the Legislature 16 THE TEXAS OBSERVER APRIL 17, 2009