Just a reminder about Perry’s unemployment tax increase

Lisa Falkenberg watches some video of Texas Workforce Commission Executive Director Larry Temple testifying before the Senate and reiterates something we knew.

Temple acknowledged Thursday to the Senate Committee on Economic Development that Texas’ decision not to take $556 million in unemployment stimulus dollars directly led to higher taxes for business owners and more borrowing from the federal government to replenish the state’s broke unemployment trust fund.

As you’ll recall, Gov. Rick Perry refused to accept a half a billion in federal unemployment stimulus dollars, saying there were too many strings attached, even though he knew the state’s unemployment fund was projected to go broke within months.

Temple testified Thursday that the commission has had to double the tax rate for businesses in order to replenish the unemployment fund. And he conceded under intense questioning from [State Sen. Kevin] Eltife that the hike wouldn’t have been as high if we’d taken the half a billion.

Earlier this week, Commission Chairman Tom Pauken notified lawmakers that the agency may have to issue $2 billion in bonds to feed the unemployment fund as time runs out on the state’s no-interest borrowing from the feds.

And for some businesses, the tax rate nearly tripled. You really need to see the video to get the full effect of Sen. Eltife’s questioning. Eye on Williamson has the key five-minute clip, which I’ve embedded here:

Sen. Eltife did his best to steer away from the politics of this, but we all know whose idea it was to turn down the unemployment insurance money. Rick Perry’s decision to do so was harmful to people who had lost their jobs and is now adversely affecting business owners. We knew this would happen, but he didn’t care.

Related Posts:

• Texas’ unemployment rate spikes
• So about all those stimulus funds
• Lawsuit filed against suspension of federal unemployment benefits