Texas Gov. Rick Perry on Thursday rejected $555 million in federal stimulus money that would expand state unemployment benefits, saying the money would have required the state to keep funding the expanded benefits after the stimulus money ran out.
Perry, an outspoken critic of President Barack Obama's $787 billion stimulus bill, did accept most of the roughly $17 billion slated for Texas in the plan.
But he said the requirements attached to the federal stimulus money would require a change in the state's definition of unemployment, expanding coverage to more people and placing more of the state's tax burden on employers.
"During these tough times, Texas employers are working harder than ever to move products to market, make payroll and create jobs," Perry said at a news conference. "The last thing they need is government burdening them with higher taxes and expanded obligations."
Perry said such an expansion would counteract the package's objective of job creation by leading companies to limit hiring and raise prices.
To receive the full amount of stimulus money available, lawmakers would need to adjust the time period used to determine whether people are eligible for benefits.
Texas also is being asked to expand eligibility to include thousands of low-wage workers. Lawmakers have said the change would help part-time employees like single mothers, college students and senior citizens.
Perry's decision comes despite warnings from Texas Workforce Commission Chairman Tom Pauken that the state's unemployment compensation trust fund could be operating at a deficit by October. Pauken told lawmakers recently that insolvency might not be not far behind.