A portion of Texas' share of the federal economic stimulus package has been in limbo since March 12th, when Governor Rick Perry indicated his intention to reject as much as $555 million dollars meant for unemployed Texans. Even with the unanswered question of how to implement the rest of Texas' $16.8 billion still looming, the unemployment money has garnered a good deal of attention. The topic has attracted the attention of legislators and the public because during the current economic recession Texas is seeing its unemployment rate rise- Texas lost more jobs in February than all but two states- while the balance in its unemployment trust fund continues to drop precariously low.
At issue is whether Texas should make certain statutory changes to its current UI eligibility regulations that would bring the state's policies in line with federal priorities. Currently, Texas' system is the most restrictive in the country, with only about 1 in 5 unemployed Texans receiving any benefits, according to the Center for Public Policy Priorities. To permit Texans to access all available full allotment of unemployment funds authorized in the ARRA, Texas would have to "modernize" its eligibility regulations, effectively widening the pool of individuals who are eligible to access unemployment benefits. If the changes are made, eligible recipients would include some part-time workers and those who leave a job for certain compelling reasons such as a family illness or a need to relocate because of a spouse's job. Texas would also have to adjust the timeframe it uses to calculate benefits, switching to the "alternative base period" system that provides the most recent data about a person's work history.
In rejecting the ARRA unemployment funds intended for Texans, Gov. Perry has stated that increasing eligibility could place a larger burden on businesses once the federal money runs out, since the unemployment trust fund comprises revenues from business taxes. In response, proponents of accepting the federal money-including labor unions, public interest organizations, and some business groups-argue that using the ARRA funds and making the necessary changes to state law actually would lessen the impact on Texas businesses since tax hikes are all but inevitable without the infusion of federal money. The current state of the trust fund is dire: it is required to have $860 million on hand on October 1, 2009, but Texas Workforce Commission executive Larry recently testified that there will be only $48 million in the account by that date.
Representative Sylvester Turner filed HCR 93, a resolution that uses a provision in the ARRA that would allow the Legislature to effectively circumvent the Governor's decision to reject the unemployment funds. There are also at least ten bills that deal with making some or all of the changes that are necessary to draw down the full allotment of ARRA unemployment funds. Four of those bills-Rep. Deshotel's HB 2623, Rep. Parker's HB 3153, Sen. Lucio's SB 1421, and Sen. Eltife's SB 1569 -propose modernizing Texas' unemployment guidelines to fit with the federal regulations. Sen. Eltife's bill was voted favorably from committee on March 30th, and Rep. Deshotel's bill will be heard on April 1st.
So, if the Legislature decides to override the Governor's decision to reject $555 million in unemployment benefits, and if it then enacts these changes to current regulations on the state level, then Texans could receive the full sum to which they are entitled under the ARRA.
There is also a provision in the ARRA that provides for a 65 percent subsidy on COBRA continuation premiums for up to nine months to those who qualify. The subsidy is available to individuals if they lose their jobs at any time between September 1, 2008 and December 31, 2009. For more information, see this Texas Impact list of individual benefits and how they can be accessed.
When they passed the ARRA in February, federal lawmakers intended to not only jumpstart the economy with government spending and incentives for energy innovation, but also to provide assistance to those who need it most during difficult economic times. As it stands now, Texans are blocked from accessing unemployment funds that were set aside for them and will certainly be paid for out of their federal income tax dollars in the future.
