Gov. Phil Bredesen talks with reporters Wednesday in the Capitol in Nashville, Tenn. AP
Tennessee Gov. Phil Bredesen (D-Tenn.) is joining Gov. Mark Sanford (R-S.C.) and Gov. Bobby Jindal (R-La.) in the small chorus of politicians who are openly wary about taking all of the federal government’s stimulus handout. At issue in Tennessee is the same sticking point Sanford and Jindal cite- expanded unemployment benefits. All three governors say that increasing the pool of people eligible for unemployment benefits would be a persistent budget challenge that would last long after the stimulus funds run out:
“We are evaluating this piece of money, whether it makes sense for us to take it,” Bredesen said in an interview Monday with the Chattanooga Times Free Press. “We’re in the position of going back to our legislature this year for changes in our tax structure just to keep our fund whole, and taking it to a new level may be too much of a lift for the legislature this spring.”
Bredesen is the seventh governor to say he may not take all the stimulus money for his state, but he is the first Democrat. Sanford and Jindal have been the most vocal, but the governors of Idaho, Alaska, and Texas have also expressed reservations. Bredesen’s objections give lie to the New York Times’ Monday editorial, which excoriated wavering governors as reinforcing the “disturbing conclusion that the Republican Party seems more interested in ideological warfare than in working on policies that get the country back on track.” Unless Bredesen has hopes of becoming a “rising Republican star,” stimulus concerns are more than political posturing. The New York Times, whose own employees may soon be familiar with the ins and outs of unemployment eligibility, blithely dismissed any objection to changes in unemployment law as both politically motivated and unfounded:
The governors are blowing smoke when they suggest that the federal unemployment aid would lead directly to new state taxes. No one knows what the economic climate will be when the federal aid has been used up several years from now. But by dumping billions of dollars into shrinking state unemployment funds, which puts money into the hands of people who spend it immediately on food and shelter, the stimulus could help the states through the recession and into a time when unemployment trust funds can be replenished. In other words, the stimulus could make a tax increase less likely. But even if new taxes are required at some point, the new federal standards would protect more unemployed workers than ever before and bring states like Louisiana, Mississippi and Texas into the 21st century.
In other words, “people are hurting, man,” the Keynesian stimulus absolutely will work, and liberal conceptions of unemployment law are morally superior, so abandon your pesky federalism and attempts at responsible accounting, and treat the American taxpayer like your own personal Mexican oligarch. They’re great! Here are the fiscal facts the New York Times can ignore while telling stories of “struggling” families hurt by Republicans:
If the state adopted such a law, businesses in Louisiana that have experienced job losses would begin to be charged higher unemployment insurance assessments as early as 2010 in order to meet the mandates of the expanded system, state Workforce Commission spokesman Curt Eysink said. The estimated extra cost to business in the state would be about $12 million per year, Eysink said. That number is based on the approximately 4,000 extra people who would have been eligible for the benefits last year had the new law been in place. The actual cost in the future could be higher if the state’s jobless rolls increase, Eysink said.
Tennessee is already raising premiums on businesses, and does not wish to raise them more to fund increased benefits:
The state Department of Labor and Workforce Development is preparing to raise unemployment insurance premiums paid by employers to bring more money into the fund. But even with that extra revenue factored in, the fund is expected to become insolvent sometime next year. Adding more obligations to the unemployment system could make it even harder to cover the shortfall, said Bill Fox, an economist at the University of Tennessee and an adviser to the fund. It might require even higher payments by businesses after the recession is over.
Maybe these guys should just follow the Times’ lead and mortgage their governor’s mansions and capitol buildings to provide for the magical unemployment funds people need when they are hurting, man.
