Perry rejects $555 million in federal stimulus money

By ALAN BERNSTEIN and GARY SCHARRER
Houston Chronicle
March 12, 2009, 10:40PM

From the center of a Houston hardware store, Gov. Rick Perry ignited a debate about Texas job cuts, business taxes and President Barack Obama’s so-called economic stimulus program Thursday by rejecting the federal government’s offer of $555 million in aid to the unemployed.

The action now moves to the Legislature, which can bypass Perry and take the offer as long as it changes state laws and blocks Republican Perry’s potential veto. Democratic lawmakers said Thursday they will try.

Perry said the money would come with too many strings attached. Taking the half billion would require the state to assist qualified out-of-work residents seeking part-time jobs, an idea that Perry said the state has rejected before, partly because it could discourage them from seeking full-time employment.

The federal money injection would also make Texas extend benefits to more low-paid workers, and Perry said the overall expansion would force business to make higher unemployment insurance payments.

He announced his stance near the Galleria at Bering’s Hardware, where descendants of the founder said they would have to pay about $12,000 more a year into the unemployment insurance fund to cover their 170 full- and part-time workers.

“Employers who have to pay more taxes have less money to make their payrollâ€