A number of Republican governors have indicated that they will turn down federal money offered to states as part of the stimulus package. The Republican governors of Alaska, Idaho, Louisiana, Mississippi, South Carolina, and Texas have signaled that they will pass on the money because it could lead to a tax increase in the future.
Governor Arnold Schwarzenegger (R-CA) had a message for them: “We’ll take it.”
As California seeks to dig itself out of a fairly deep economic hole, Schwarzenegger said:
I am more than happy to take his money or [that of] any other governor in this country that doesn’t want to take this money. I take it because I think California needs it.
Schwarzenegger does not believe that the provisions in the stimulus package will result in an increase in taxes in the near future. But my own Governor, Ed Rendell (D-PA), begs to differ. He told Fox News Sunday that “I’m not sure that we can, over the long run, cope with the high unemployment compensation standard that this mandates for states.” He did, however, say that Pennsylvania would be taking the money anyway.
What exactly is the hubbub about? In the stimulus bill, federal dollars can be used by the states to expand their unemployment insurance program. However, if the states take the money, they must agree to expand the number of people who are given jobless benefits. That, some say, will be a problem once the federal money runs out (of course, that assumes that the current unemployment rates remain largely the same, which we hope is not the case in a few years).
So, that’s the end of that, then, right? Not really. The law allows a state legislature to overrule a governor’s decision not to take the money.
Hmm. What if I say that I don’t want the money because of the potential for debt down the road… when I know that the legislature will take it anyway? Ooh, those clever political strategists…
Gov. Perry has already backed down in Texas. It’s S.O.P. in Texas to tell the federal government “we don’t need no stinky federal money” but they always end up caving, in the 25 years I’ve been here. I could make comments about some local cultures not having evolved past a crabby 4yo who “can do it all by myself” , but that would be rude and inflammatory.