Sunday, March 01, 2009

Texas Running Out of Funds for Unemployed

Remember last week when Texas' governor Rick Perry was grandstanding about how he was going to turn down President Obama's stimulus funds rather than risk spending more, two years from now? This week, he's running out of money. Funny how that happens when you're not planning well.

The Texas Workforce Commission is going to have to ask the federal government for money to pay existing claims.

The head of the Texas Workforce Commission says the state may need to seek a federal loan to maintain the unemployment compensation trust fund.

Chairman Tom Pauken says with more people losing their jobs, that a "real deficit" could come by September of October.

The update comes as Texas lawmakers debate expanding unemployment benefits.

"It's just a bad situation," Pauken said in a story for Saturday's San Antonio Express-News and Houston Chronicle. But everyone will continue to get their benefits, he said, as Texas plans to deal with the potential shortfall problem in advance.

Texas had 26,071 initial claims for benefits during the week of Feb. 14, compared with 11,226 initial claims for the same period one year ago.

Texas could obtain an interest-free loan from the federal government to keep the state fund solvent, Pauken said. After that, Texas could issue bonds, with a tax increase on businesses to pay for the financing, he said.

The Texas Association of Business opposes changes to the state's jobless program.

The official projection from the TWC says the jobless fund's balance, by Oct. 1, is estimated to fall from the current $1.1 billion to $109.4 million.

That would be far below the required $859 million, an amount equal to 1 percent of all taxable wages. The TWC in January was projecting a $447 million shortfall.

Texas could receive $555 million in federal stimulus money if it changes its jobless benefits to allow more people to qualify. The matter would involving adjusting the time period used to determine whether people are eligible for benefits.

GOP Gov. Rick Perry has said he is against funding to expand programs and then leaving Texas to pay when the federal money is gone.

No one questions what it means to have lame-brained poseurs in charge of the state. It has meant poor to criminally inadequate services. It has meant scandalous rulings that favor business and destroy public interest. It is past time for the state's voters to begin ending the insanity.

That Sen. Hutchison is favored over the incumbent governor is one indication that the spectacle of reprehensible misbehavior is breaking through the state's usual indifference to rational government policy.

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