Gov. Jindal's decision to turn down part of the stimulus package is pitting Democratic lawmakers against business and industry.
What Democratic lawmakers describe as a hidebound decision by Gov. Bobby Jindal is viewed by business interests as smart policy. To be sure, when it comes to Jindal's decision to refuse part of President Barack Obama's massive stimulus package, the high-profile Republican has his critics and his fans.
A group of state lawmakers recently held a teleconference to voice their opposition. They want to go over the governor's head during the upcoming legislative session and create a soft spot for the money to land, which the stimulus bill allows — setting the stage for an interesting battle.
Sen. Butch Gautreaux, a Morgan City Democrat who is part of Jindal's leadership team as chairman of the Senate Retirement Committee, complains the governor is grandstanding. "There's no question in my mind that it's all political and this is about the governor's presidential interests," Gautreaux says. "I support the whole stimulus package, as do many others. Jindal is absolutely incorrect on this. It's all Rush Limbaugh-speak. It's misinformation."
Obama's stimulus package directs roughly $3.8 billion to Louisiana in aid and tax breaks. Jindal was the first Republican governor to reject part of the aid — some $98 million in unemployment assistance. Since then, Govs. Haley Barbour of Mississippi and Mark Sanford of South Carolina have turned down their states' shares.
Jindal says the cash comes with costly strings that would require Louisiana to change its laws and possibly hike business taxes. Democratic lawmakers disagree and say they're prepared to insert the money into next year's state budget. Some lawmakers are even filing legislation to alter Louisiana's unemployment laws to track the stimulus requirements.
Gautreaux, for one, says the changes could always be reversed later. "The stimulus package doesn't call for a permanent change in law," he says. "The fact is that every law can be repealed."
Rep. Kevin J. Pearson, a Slidell Republican who supports Jindal's decision, admits that possibility, but he still opposes taking the money. "Once you give something like this, it's tough to take it away," he says. "The only way to do it would be sunsetting it to go away in two years."
If lawmakers do act independently, Jindal could veto the effort. The Democratic-controlled Legislature could override his veto, but that takes a two-thirds majority from both chambers.
Moreover, lawmakers won't just be fighting Jindal. Business and industry groups consider the stimulus bill's unemployment provisions a bad idea as well.
Renee Baker, the Louisiana director of the National Federation of Independent Business, says once the stimulus money runs out, Louisiana would have to raise payroll taxes to continue funding the expanded benefits. "Gov. Jindal is doing the right thing by refusing $98 million for federal unemployment assistance," says Baker. "It's hard to turn down that kind of money, especially when so many people are telling you to take it, but Gov. Jindal is right when he says the money comes with too many strings attached."
According to the Louisiana Association of Business and Industry (LABI), there are actually three provisions in the stimulus package regarding unemployment compensation. The first adds six extra months of emergency unemployment compensation benefits, which the feds would bankroll. The second calls for an extra $25 per week in benefits through June 30, 2010, another perk funded with federal dollars.
The third provision is the one rubbing Jindal the wrong way. It would transfer pro-rata shares of $7 billion to states from federal unemployment compensation taxes paid exclusively by employers. States will receive this money only if they enact new unemployment laws, which only 18 states currently have, none of them in the South.
The stimulus package outlines four possible law changes; states must adopt two of them to get the dough. The first two would ensure individuals would not be denied benefits because they refuse to work or aren't searching for full-time work, or if they quit work for a "compelling family reason" over which the employer has no control. The third possible law change would allow individuals to receive an additional six months of benefits if they enroll in state-approved or federal workforce training. The final one would create dependent allowances of at least $15 per dependent.
Jindal, most state Republicans and business interests are opposed to all of the potential changes. Dan Juneau, LABI's president, says the purpose of the unemployment compensation system has always been to provide assistance to workers who lose their jobs because of what happens in the workplace and not at home, and who genuinely desire to rejoin the workforce. "Adoption of the expensive expansions in the stimulus package would constitute a significant departure from this," he says.
The business community's top argument against the proposed "expansions" involves protecting the solvency of Louisiana's unemployment compensation fund. While a new group of individuals would get benefits under Obama's plan, Juneau and others contend that unemployed individuals in Louisiana who are already eligible might see their benefits reduced. "This is not free money," Juneau says. "It comes at a price."
Jeremy Alford can be reached at email@example.com.