Jindal to refuse some stimulus money (http://news.yahoo.com/s/politico/20090220/pl_politico/19092 - broken link)
In a statement, Jindal, who is slated to give the Republican response to President Barack Obama’s message to Congress on Tuesday, expressed concern that expanding unemployment insurance coverage would lead to increased unemployment insurance taxes later on.
“The federal money in this bill will run out in less than three years for this benefit and our businesses would then be stuck paying the bill,” Jindal said. “We must be careful and thoughtful as we examine all the strings attached to the funding in this package. We cannot grow government in an unsustainable way.”
Jindal rejects $98 million in stimulus spending - Breaking News from New Orleans - Times-Picayune - NOLA.com
BATON ROUGE -- Saying that it could lead to a tax increase on state businesses, Gov. Bobby Jindal announced Friday that the state plans to reject as much as $98 million in federal unemployment assistance in the economic stimulus package.
Jindal, who has emerged as a leading Republican critic of the $787 billion spending and tax-cut bill signed into law this week by President Barack Obama, said the state would accept federal dollars for transportation projects and would not quarrel with a $25-per-week increase in unemployment benefits.
Both of those items are financed entirely with federal dollars and require the state only to accept the money. The part that Jindal rejected would require permanent changes in state law that the governor said makes it unacceptable. "You're talking about temporary federal spending triggering a permanent change in state law, " Jindal said.
At issue are two pots of federal money that states can access only if they agree to change their laws to make it easier for unemployed workers to qualify for benefits. To access the first pot of money, worth $32.8 million over 27 months, Louisiana would have to offer benefits to workers who have held jobs for as little as three months before becoming unemployed. Workers now have to hold a job for at least a year before they are eligible to collect unemployment.
The Louisiana Workforce Commission, which administers the state's unemployment insurance system, estimates that an additional 4,000 former workers would become eligible for benefits under that change.
A second pot of money, valued at $65.6 million, would be available to Louisiana only if it agreed to other, larger expansions of benefits. For example, the state could extend benefits to part-time workers or change the law so that people could collect unemployment if they voluntarily left their job for "compelling" family reasons.
As the Jindal administration interprets the law, Louisiana would be required to keep providing the expanded benefits even after the federal stimulus dollars run out at the end of 2010. That, in turn, would lead to higher costs on businesses, whose taxes finance the state's unemployment compensation fund.
According to the Workforce Commission, the expanded benefits would cost Louisiana companies $12 million a year after the federal money ends. The businesses, in turn, would pass those costs on to their workers. "I don't think it's good policy to take temporary federal dollars to create a permanent state spending obligation, " Jindal said.
Louisiana's 5.5 percent unemployment rate in December was well below the national rate of 7.6 percent. The state was one of only three that added jobs in December, along with Florida and Vermont.
The Louisiana Association of Business and Industry said in a news release that the benefit expansion contained in the federal law could have grave unintended consequences.
"Employers, who are the exclusive funding source for unemployment benefits, and unemployed workers, who are the benefit recipients, cannot afford this, " said Jim Patterson, head of LABI's employee relations council. Curt Eysink, a spokesman for the state Workforce Commission, said Louisiana businesses pay lower unemployment taxes on average than companies in other states and that unemployment benefits in the state are also below the national average.
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