Capitol leaders debate Texas stimulus money

By KELLEY SHANNON

The Associated Press

AUSTIN - Capitol Democrats and Republicans debated again Friday whether Texas should accept $550 million in federal unemployment stimulus money that GOP Gov. Rick Perry has rejected.

"This is basically a rebate for Texas employers," Democratic Rep. Jim Dunnam of Waco, who chairs a Texas House committee charged with overseeing federal stimulus money, said in urging that the state accept the money.

House Appropriations Chairman Jim Pitts, a Waxahachie Republican, agreed. He said Texans who qualify for unemployment compensation will receive their payments - it's just a matter of who will pick up the tab.

They spoke to a conference of the Texas Lyceum, a statewide leadership group, which was meeting in Austin.

Perry, a Republican and critic of President Barack Obama's $787 billion stimulus package, has accepted most of the roughly $17 billion slated for Texas, but he has said he is turning down the unemployment fund money because it would require the state to expand its benefits and keep paying for the expansion after the stimulus money runs out.

Perry's legislative director, Ken Armbrister, said the federal money would require Texas to cover part-time workers or expand unemployment benefits in other ways. He said the governor does not want to "change statute by fiat" of the federal government.

Armbrister said Perry's office is continuing to carefully examine requirements for how the federal stimulus money must be spent by the state.

Armbrister seemed to leave a possible opening for accepting the unemployment funds - if state lawmakers pass legislation to permanently change the state's coverage applying to part-time workers or the work period that's considered for unemployment compensation.

"They still have an opportunity to introduce legislation to take care of that, then we'll look at it again," he said, adding that Texas' rejected stimulus money is not redistributed to another state.

Texas' unemployment insurance trust fund is rapidly being drained and is projected to have only $48 million, or $812 million less than it should, by October, triggering a higher tax on employers.

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