Virginia’s loss is Texas’ gain: legislators vote to accept stimulus money

By Nathan Thomas at April 17, 2009 - 11:38am
Policy News

Virginia’s loss is Texas’ gain: legislators vote to accept stimulus money

Last week, Virginia Republicans rejected $125 million in extra federal stimulus money for the state unemployment system. Without the extra money, the system will go broke much sooner than it would have – probably by the end of the year – forcing state businesses to absorb a doubling of unemployment taxes (from $95 to $201 per worker per year). That’s a pretty steep price for Virginia businesses, one that reveals the embarrassing cost of the Republicans’ petty temper tantrum.

In Texas, a similar situation has played out, with much more interesting results.

Republican Governor Rick Perry, desperately trying to win back the right-wing base in his primary fight with Republican Senator Kay Bailey Hutchison, pledged to reject more than $550 million in stimulus funds for the Texas unemployment system.

Perry’s “reasoning” on the matter was the same as Virginia Republicans -– he opposed minor changes to the unemployment system that would have made it slightly -– and temporarily -– more generous.

But when Texas State Senators learned that their unemployment system would also be broke by October, they voted overwhelmingly to take the money.

Even with Democrats united behind the plan, Republican support was needed to pass the measure in the GOP-held Senate. After one more procedural vote in the Senate, the bill will move on to the house, where support is also strong. The 22-9 Senate vote (a unanimous Democratic caucus joined by 10 Republicans) was best summed up by Democrat Rodney Ellis:

Sen. Rodney Ellis, D-Houston, applauded Eltife for carrying the bill and called the governor's opposition "penny-wise and pound-foolish."

"I doubt most Texans think sending a half-billion of our tax dollars to other states while doing nothing to save the state's faltering unemployment trust fund is the best way to pull ourselves from this recession," he said.

Like in Virginia, failure to accept this money would cause enormous strain on Texas businesses, which would be hit with a special “‘deficit’ unemployment insurance tax.” To their credit, Texas Democrats and some Republicans saw the numbers and decided to show a little foresight and common sense.

Back in Virginia, Republicans are still as stubborn as ever.

I am so sorry that you went against the Governor on accepting stimulus. The people of Texas deserve to have someone looking out for us against this administration and spending our children's money.

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