Gov. Rick Perry has a funny way of helping Texas companies.
He wants to reject $555 million in federal stimulus money, because it would expand the state's unemployment insurance program, and he says that would hurt employers.
"The last thing they need right now is government burdening them with higher taxes and expanded obligations," Perry said last week at a photo op in a Houston hardware store. "The math is simple: Employers who have to pay more taxes have less money to meet their payroll, hire new employees and grow their business."
If the math is so simple, why can't the governor figure this out?
Taking the stimulus money will actually save on taxes, at least in the near term, and it would cover the cost of benefits for an additional 45,000 out-of-work Texans for years to come.
That's right: Take the stimulus, and Texas businesses avoid taxes. Reject the federal money, and they'll pay an estimated $60 per employee in additional unemployment taxes in the next year, says the Texas Taxpayers and Research Association in Austin.
It works out this way because the feds are offering a lump-sum payment upfront, recognizing that cash-strapped states need to shore up their unemployment insurance. By October, Texas is projected to be $812 million below its funding floor for the program, and that will trigger a "deficit tax" on employers.
The stimulus money would cover about two-thirds of the shortfall.
Oh, there's a bill that comes due down the road. But it's way down the road, it's small, and we may be able to avoid it altogether if Texas can trim its benefits by cutting fraud and abuse.
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