Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Benjamin Armbruster, Ali Frick, Ryan Powers, and Pat Garofalo
American Progress Action
The Progress Report
March 26, 2009
Since President Obama signed the economic recovery package into law last month, a handful of Republican governors have come out and “rejected” some of the funds, which are aimed at alleviating budget cuts plaguing state and local governments. For instance, Gov. Bobby Jindal (R-LA) turned down $98 million in extended unemployment benefits, while Gov. Sarah Palin (R-AK) initially planned to reject half of Alaska’s funding, including $160 million for education. During the press conference announcing her decision, Palin asked, “Will we chart our own course, or will Washington engineer it for us?” But by rejecting this funding, the governors are turning away one of the most effective forms of stimulus available, despite the budget crunches that they are all facing. At least 47 states are facing budget shortfalls for this year and next, and 34 states have made budget cuts that will harm vulnerable residents. As it stands now, the stimulus package is “sufficient only to fill about 40 percent of the $350 billion to $370 billion shortfall that states face in the next two-and-a-half years,” and unemployment rates keep rising. The Progress Report rounds up the actions of some grandstanding governors.
ALASKA’S SARAH PALIN: In rejecting the stimulus funds, Palin complained about “the strings attached” and said, “I can’t attest to every fund that’s being offered the state in the stimulus package will be used to create jobs and stimulate the economy, so I’m requesting only those things that I know will.” The Anchorage Daily News criticized Palin for her decision, saying, “It makes you wonder if her national political ambitions are leading her one way, when what’s best for Alaska leads another,” and residents organized a protest last Saturday to urge the governor to accept the money. Top Alaskan legislators have said “they’re likely to accept at least most of the federal economic stimulus money that Gov. Sarah Palin did not,” prompting Palin to NOW claim that “she didn’t say she would actively block the money, and would be willing to participate in a discussion with the Legislature about what they would accept.”
SOUTH CAROLINA’S MARK SANFORD: Despite South Carolina having the second highest unemployment rate in the nation, Sanford rejected $700 million in stimulus, saying, “[W]hat you’re doing is buying into the notion that if we just print some more money that we don’t have and send it to different states, we’ll create jobs. … If that’s the case, why isn’t Zimbabwe a rich place?” According to calculations made by the White House, Sanford’s refusal of the funds eliminates 50,000 potential jobs, and the South Carolina Department of Education estimated that, without the money, 7,500 teachers would be negatively impacted. House Speaker Bobby Harrell said that absent federal funding, South Carolina would have to close three to four prisons, release an unknown number of prisoners, and lay off 4,000 to 5,000 teachers. “I am very frustrated,” Harrell said. “We’re talking about affecting lives of people in this state in a very bad way.” Sanford twice requested permission to redirect the funds to paying down his state’s debt, and was twice rebuffed by the Obama administration.
LOUISIANA’S BOBBY JINDAL: Claiming that it could lead to a tax increase on small businesses, Jindal rejected $98 million federal unemployment assistance. “That would’ve actually raised taxes on Louisiana businesses. We as a state would’ve been responsible for paying for those benefits after the federal money disappeared,” he said. Clarence Hawkins, the mayor of Bastrop, LA, replied to Jindal, saying, “[G]ive me something now. … Help me right now. I need to survive today.” The Center for American Progress Action Fund concluded that Louisiana added 430 new unemployed people every day in December. Many Louisiana companies — including River West Medical Center, Dow Chemical Co., Louisiana Pacific and Shreveport-Bossier City casinos — have laid off workers. Furthermore, if cuts announced by Jindal occur next year, officials from the Louisiana State University system estimate that 2,000 employees might be laid off. According to a letter sent by the U.S. Department of Labor, “Louisiana would not be required to make a permanent change in state law by accepting the federal dollars expanding unemployment benefits.” State Sen. Eric LaFleur (D) said that the letter “dispels the governor’s argument.”
MISSISSIPPI’S HALEY BARBOUR: Barbour advanced the same false argument about unemployment benefits as Jindal, claiming that accepting the money would mean raising unemployment taxes on businesses by 20 percent each year. “Some people have suggested that we change our law and then change it back once the stimulus money is spent, but that isn’t honest,” he said. State House Majority Leader Tyrone Ellis (D) replied, “I just think it’s a sad commentary that we’re even discussing such a thing. … It’s puzzling to me why any governor or government would suggest that we are only going to take part of the money and not all of it.” Mississippi has an 8.7 percent unemployment rate, though the rate tops 19 percent for some counties. The state House voted to accept the stimulus’ funding over Barbour’s objections, certifying “the state’s intent to request and use all of the money, even if Barbour rejects some of it.” However, efforts to bypass Barbour have stalled in the state Senate.
TEXAS’S RICK PERRY: Perry rejected $555 million in unemployment benefits, saying, “[T]his was pretty simple for us. … We can take care of ourselves. And we do not need any more strings from Washington attached to programs.” But according to the Dallas Morning News, “Texas covers the smallest percentage of unemployed workers of any state,” and “four out of five laid-off workers are not eligible for unemployment benefits.” Texas’s unemployment rate is at a 19-year high, and the state’s unemployment fund is running low, “making a tax hike for employers almost a certainty next year.” The Texas Comptroller “estimates Texas will lose 111,000 jobs in 2009, hiking unemployment to 8.2 percent.” The Texas House appropriations committee has “endorsed enacting the necessary changes to state law so that Texas would be eligible for the money.”
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