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Perry Questions Whether State Will Borrow $2 Billion

By Shelley Kofler, KERA News

http://stream.publicbroadcasting.net/production/mp3/kera/local-kera-852113.mp3

Dallas, TX –

Governor Rick Perry is standing by his decision to reject federal stimulus money for unemployment benefits, even though the state may now have to borrow billions to pay for unemployment. Shelley Kofler has more on a story first reported on KERA.

It was Texas Workforce Commission Chairman Tom Pauken, appointed by Governor Perry, who told KERA- the state will have to borrow up to $2 billion to pay unemployment benefits.

Kofler: The state of Texas may have to borrow up to $2 billion?

Pauken: Yeah, that could well be the case in terms of a bond over a seven-to-10 year period.

While in North Texas Wednesday, the Governor seemed to question whether the amount to be borrowed will be that high.

Perry: For any of us to say what that number is at this time is premature.

This issue is sensitive for Perry. He told Washington, "no thanks," when the Obama administration offered Texas $555 million federal stimulus dollars to pay for unemployment claims. Many state lawmakers wanted to take the money. They said it would limit the amount to be borrowed or paid by Texas businesses. But Perry still stands by the decision. He says taking the money would have forced Texas to expand the program and begin offering unemployment benefits to those only seeking part-time work.

Perry: Washington DC was forcing states to change their program to access the money and we said, "No." We looked at it long term and it cost us $75 million a year in the out years every year.

But Democratic Representative Jim Dunnam claims that cost was far less than what Texans will now have to pay. Dunnam chairs a stimulus funding committee in the Texas House. He says the federal government told lawmakers in writing they could return to the current employment program in two years.

Dunnam: He's borrowing the money the feds would give us for free. The amount of interest we are going to pay is far beyond the cost of any changes necessary to receive the $555-million.

The unemployment benefits fund is supported through a tax on Texas employers. Dunnam says employer taxes will go up more than necessary because the Governor rejected the stimulus money.

Perry backers say they doubt part time job seekers would ever be removed from the program once it expanded. They, like Perry, claim employers will pay less over the long haul.

For additional information and resources go to our special webpage, kera.org/economy.

Email Shelley Kofler