Feds bail out Texas after years of insolvent-level unemployment taxing

[TexasTowelie]

Source: Texas Public Radio

Texas, a state that hates federal involvement so much that in addition to suing federal officials on a near-monthly basis, it built its own (faulty) power grid, is now taking a massive federal bailout for unemployment.

Texas House Speaker Dade Phelan and Lt. Gov. Dan Patrick announced last week they would put $7.2 billion from the Biden administration’s American Recovery Plan Act into paying back billions in loans the state took out from the U.S. Treasury — shifting the tax burden intended to be borne by Texas employers to taxpayers nationwide.

The state unemployment rates skyrocketed last spring because of the pandemic, climbing to nearly 13%. The state’s anemic coffers were quickly drained, and it began taking federal government loans. Then the federal government added additional monies on top through pandemic assistance for the unemployed. State and federal unemployment payments were more than $51 billion in Texas since the pandemic began.

The plan is to erase the state’s $5.9 billion in Title XII (unemployment) loans and add more than a billion to the unemployment trust fund. This nixes additional interest payments and allows the legislature and the Texas Workforce Commission — who oversees unemployment — to continue to avoid tough decisions about taxing appropriately. It allows the state legislature to continue on its business-friendly course, now at the expense of every other state.

Read more: https://www.tpr.org/business/2021-10-29/feds-bail-out-texas-after-years-of-insolvent-level-unemployment-taxing

[MichMan]

1. Pretty likely the same in every state

State unemployment systems are not designed to have 2/3 of all businesses shut down for months over a pandemic

Doesn't seem right that a business ordered to be shut down should then be hit with much higher unemployment taxes for doing just that.

[rpannier]

8. That's probably true

Last edited Fri Oct 29, 2021, 10:40 AM - Edit history (1)

But multiple politicians from Texas keep telling us how we should stay out of their affairs and let them run their state
Doesn't matter that they have a dozen military bases that they'd never be willing to part with, along with other federal projects (super-collider in the 80s)
If they're so damned independent and feel the federal gov't has no place telling them what to do, they should either a) stop whining and coming hat in hand for a bail-out, or b) openly admit loudly that they do need federal assistance

[SergeStorms]

28. +1000

It's getting to the point where I wish Texass (intentional) would secede.

[inthewind21]

42. They already did, they lost

And they have been crying for federal money ever since. Texas would never be able to survive without the rest of the countries freebied to those slackers.

[IthinkThereforeIAM]

29. Exactly...

... what you posted about Texas and the military bases, along with the military hardware manufacturing plants. Texas made big bucks off the Vietnam war were every one of the Huey helicopters were made, for example.

I often contemplate that many of those military hardware manufacturing plants should be moved to other states, but it is so ingrained into the, "culture", of Texas.

It seems the only solution is to, "Make Love Not War", to the point that the whole industry dies out, everywhere, but no place more so than Texas.

Texas lets their energy grid be a joke because they know in the end the Feds will come in and bail them out some way or some how.

[bluewater]

36. Exactly!

[paleotn]

38. Agreed. System wasn't set up for black swans.

I'd like to just say screw Tejas, but like you, I doubt they're alone in this debacle.

[inthewind21]

41. Seeing

As Texas never really shut down during covid, they need to pay their own bills. It's not the job of taxpayers all over the country to pay Texas way. Lie they always have. One of the biggest welfare states on the planet.

[Champp]

2. Lone Star Hypcrites (R)

Texas Repubes bad mouth the USA all the time, but got their grubby, grifty hands out for USA taxpayer loot.

[Vinca]

3. And here I thought they wanted to secede from the welfare state (as they call it).

Funny how all the bloviating is forgotten when billions are dangled in front of their eyes.

[bucolic_frolic]

4. Is RICO applicable?

And why don't 49 other states sue to block subsidies? Why are we paying for the state of Texas' malfeasance and fiscal irresponsibility?

[MichMan]

6. Are the other states rejecting federal dollars?

[bucolic_frolic]

12. Is that the issue? States that don't collect tax adequately can pass the cost to the Feds

So it's not what you accept, it's what you collect. It's a bottom line, fiscally conservative issue. You know, get the government off the states' backs, but then soak all Federal taxpayers to pay for your own malfeasance. At least that's what I think I'm reading in this story.

[MichMan]

14. 18 U.S. States Owe Federal Government Over $52 Billion for Unemployment Loans

Eighteen U.S. states owe the federal government over $52 billion in unemployment loans that were taken to aid relief for the COVID-19 pandemic that hit in March 2020, the Associated Press reported.

California is at the top of the list, with almost $21 billion in unemployment debt, followed by New York with over $9 billion and Texas with nearly $7 billion. The recession a decade ago saw 35 states collectively accumulate over $40 billion worth of unemployment debt that took years to repay.

At least 29 states have transferred or proposed using federal coronavirus relief aid for their unemployment trust funds, according to an AP analysis. The total for all states was $12 billion, ranging from a $25 million transfer in Wyoming to commitments of as much as $1.5 billion in Ohio.

The federal government has provided several rounds of aid to states since the coronavirus pandemic began last year, culminating with $195 billion of flexible funds included in the American Rescue Plan signed by President Joe Biden. U.S. Treasury Department guidance allows the money to be used to replenish unemployment trust funds to their pre-pandemic levels.

Maryland Republican Governor Larry Hogan and California Democratic Governor Gavin Newsom each announced budget plans this spring that would use $1.1 billion in federal COVID-19 funds to bolster their depleted unemployment compensation accounts.

https://www.newsweek.com/18-us-states-owe-federal-government-over-52-billion-unemployment-loans-1595585

[TxGuitar]

34. Shh....

Don't you know this is a Texas bashing thread? Sarcasm emoticon

[IthinkThereforeIAM]

31. That occurrs to me often...

... at least more stare downs are needed when Texas pulls this crap. It is like getting away with arson committed upon your own home. And the Feds come in and, "pay the insurance claim", regardless that they brought it upon themselves, deliberately.

[Trueblue Texan]

5. Well, so much for "Texit"

Those secessionists will be so disappointed when someone reads this to them.

[bottomofthehill]

7. Call their bluff on Texit.

Let them bring it to a vote and if it passes, let them go.

[gab13by13]

9. Fucking deadbeat takers, Socialists

[True Blue American]

10. Ohio has 3.8 billion fraud on unemployment.

One more fraud added to Mike DeWine. We have had some bad Governors. He is the worst. One fraud and scandal after another. If we do not clean house, Ohio is down the drain.

[MichMan]

11. This one takes the cake

Fired from the State of Michigan for fraudulently approving $3.8 million in fake claims while working from home, yet her state issued computer was not seized nor was her log in and passwords deactivated. So after being fired, she continued to do it for another entire month.


Detroit — A former state contractor who helped orchestrate a $3.8 million fraud scheme involving money intended to help unemployed people during the pandemic was sentenced to almost five years in federal prison Thursday.

U.S. District Judge Paul Borman sentenced former Michigan Unemployment Insurance Agency contract employee Brandi Hawkins, 40, of Detroit to 58 months in federal prison four months after she pleaded guilty to wire fraud. She admitted receiving bribes from people to file fraudulent unemployment insurance claims from April to June 2020, often using stolen identities.

The scheme netted $3.8 million in state and federal aid intended for unemployment assistance during the COVID-19 pandemic. Hawkins spent bribe money on high-end handbags and other luxury goods and investigators recovered more than $200,000 from her home during a federal raid, prosecutors said.

Along with prison time, Hawkins was ordered to pay $3,793,186 restitution to the state.

Court records show Hawkins was terminated in June 2020 but continued to remotely access state systems. She was charged the next month.

https://www.detroitnews.com/story/news/local/michigan/2021/10/28/state-contractor-brandi-hawkins-sentenced-role-3-m-fraud-scheme/6177000001/?commentID=c847a7b5-91a0-4ea2-b562-ce0c63bb1dc1

[True Blue American]

15. How can voters not see the corruption?

It took Republicans months to fire Householder after he was re- elected. No one else on the ballot. The scandal was front page news but they voted for him. The nuclear and coal fired bail out was voted down after they were caught with their hands in the cookie jar, but Mike had signed that bill.

After promising angry people in Dayton, who booed him off the stage after the massacre he promised them a gun safety bill. He just signed an open carry, no license bill.

[catrose]

13. Did Texas ever touch its rainy day fund?

[Traildogbob]

16. The corrupy

Lt. gov has probably touched it all. And never let go of the grip.

[catrose]

20. Lol true. For most gov assistance, you need to have spent your assets.

Maybe Texas is special.

[justhanginon]

30. Texas is special only to Texans!

[walkingman]

32. This Texan thinks that Texas is exceptionally stupid. But as

they say "We get the government we deserve" - and my friends we have some real assholes running this state.

[catrose]

40. We certainly do.

I wanted Abbott’s and Cruz’ votes recounted because I couldn’t stand the thought that so many Texans voted for them. But here we are. It’s more believable now.

[inthewind21]

43. And this Texan

agrees with your thinking!

[Trueblue Texan]

44. Well this Texan didn't get the government she deserved!

And like most of you, yes, I love my home state. Instead of leaving, I'd rather stay to work and make it better. But I'm getting so tired of the fight. And every day it seems more impossible. But I'm still here.

[walkingman]

45. I hear ya! But to be perfectly honest I think it has gone downhill

since '94 with the election of "W". The most disturbing thing for me is the obvious almost civil war between urban and rural folks. I have lived in rural Central Texas for over 30 years and we still have "Trump Won" flags flying around here. There are a lot of people moving out to the country from Austin and my next door neighbor made the comment..."I hope no more of these liberals move out here". Hell honey, I was here long before you were.

[TexasTowelie]

27. The serious answer is yes.

Texas did tap its reserve fund. See the second bullet point under Rainy Day Fund Highlights.

https://www.pewtrusts.org/en/research-and-analysis/articles/2021/05/17/states-total-rainy-day-funds-fall-for-first-time-since-great-recession

[MichMan]

17. 29 states have transferred or proposed using federal coronavirus relief aid for unemployment

Eighteen U.S. states owe the federal government over $52 billion in unemployment loans that were taken to aid relief for the COVID-19 pandemic that hit in March 2020, the Associated Press reported.

California is at the top of the list, with almost $21 billion in unemployment debt, followed by New York with over $9 billion and Texas with nearly $7 billion. The recession a decade ago saw 35 states collectively accumulate over $40 billion worth of unemployment debt that took years to repay.

At least 29 states have transferred or proposed using federal coronavirus relief aid for their unemployment trust funds, according to an AP analysis. The total for all states was $12 billion, ranging from a $25 million transfer in Wyoming to commitments of as much as $1.5 billion in Ohio.

The federal government has provided several rounds of aid to states since the coronavirus pandemic began last year, culminating with $195 billion of flexible funds included in the American Rescue Plan signed by President Joe Biden. U.S. Treasury Department guidance allows the money to be used to replenish unemployment trust funds to their pre-pandemic levels.

Maryland Republican Governor Larry Hogan and California Democratic Governor Gavin Newsom each announced budget plans this spring that would use $1.1 billion in federal COVID-19 funds to bolster their depleted unemployment compensation accounts.

https://www.newsweek.com/18-us-states-owe-federal-government-over-52-billion-unemployment-loans-1595585

[jaxexpat]

18. Austin hasn't figured out how to garner revenue from state income taxes yet.

They'll catch on some day. Meanwhile their patchwork approach to budgetary income and payment allocation is selectively attacked by those same interests that, at the end of the day, hold the purse strings. The feds could take the reins of fiscal control over these "welfare states" if enough people understood and were REALLY concerned about the national debt. The universal truth about conservatism is that conservatives don't understand balance, much less conservation. They've come to appreciate the notion of "supply and demand" with their hands in other people's pockets. The famous "sale with the thumb on the scale" trick.

[Mr. Sparkle]

19. Texas is one of the biggest basket cases in the south

The Feds should stop bailing them out, if they don't want to tax their tax cheats. Blue states are paying their taxes so they dont have to pay theirs.

[plimsoll]

23. As much as I loath that state,

It's one of the few red states that carry it's own weight, federal taxes speaking. I just wouldn't want to live in any of them. We can see how close those red states are to actual failed states. A relatively mild pandemic pushed most of them into an alarming mass psychosis. These folks are a Texas two-step away from being Somalia.

What I don't think they get in their "rugged independence" cosplay is how much the non-delusional segment of society has to subsidize them. What the non-delusional segment needs to remember is that the red state psychosis is fundamentally dangerous, and our best chance is probably to subsidize them.

Since they're "capitalists" perhaps a viable modification to the filibuster rule would be to assign a weighted vote based on a Senators states percentage of the net revenues their state pay and receive from the federal government. Sure Son of Zodiac gets more power that way, but Moscow Mitch doesn't count at all.

[TxGuitar]

35. As MichMan has said- it is not just Texas

Maryland Republican Governor Larry Hogan and California Democratic Governor Gavin Newsom each announced budget plans this spring that would use $1.1 billion in federal COVID-19 funds to bolster their depleted unemployment compensation accounts.

https://www.newsweek.com/18-us-states-owe-federal-government-over-52-billion-unemployment-loans-1595585

[The Jungle 1]

21. Blue states pay taxes red states spend our money.

Then they scream at us.

[plimsoll]

26. I'm way to lazy to type this out again, and copy and paste is just low density storage.

Texas and other red states

[KS Toronado]

22. Seems like it is always the taxpayers who foot the bills.

Companies & corporations can't afford it, so they claim.

[bronxiteforever]

24. Kick

[IronLionZion]

25. Of course Texas will politely decline this socialist bailout

because they love freedom

[dalton99a]

33. Kick

[OneCrazyDiamond]

37. This is normal.

I mean how do you collect enough in taxes to cover TFG's incompetent response to a pandemic?

https://www.cnn.com/2021/10/01/politics/pandemic-unemployment-benefits-federal-loans/index.html

Colorado is using federal funds to pay its $1.4 million interest tab on its $1 billion loan, while Hawaii plans to completely extinguish its $7.43 million in debt by the end of the year by utilizing relief money. Pennsylvania said it was still reviewing its options to pay off its nearly $809 million balance.

Massachusetts lawmakers approved legislation to allow the issuance of bonds to repay the state's $2.3 billion loan so that employers are not hit with federal tax increases and to replenish the trust fund.

Texas has already paid off $1 billion of its balance with tax revenue from employers, which will also cover the $8.2 interest due at the end of September. But the state did not increase its overall unemployment tax rate for 2021 and plans to limit the future impact on businesses through measures that include issuing bonds. The state's balance now stands at nearly $6 billion.

Asked about plans to settle its tab, California's unemployment agency said Democratic Gov. Gavin Newsom has urged Congress to waive interest payments, and New York's agency said it is asking the federal government to forgive the loan entirely, or at least the interest.
California recently used state general funds to pay $29.3 million in interest on its nearly $20 billion balance, but New York declined to specify what money it utilized for a $3.4 million interest payment on its $9 billion loan.

[Grins]

39. "Every major recession in the past 25 years..."

From the link:

“Every major recession in the past 25 years has sent low-business-tax Texas to Uncle Sam with its hand out to borrow.”

25-years ago = 1996 = famed dry-drunk, Gov. George W. Bush. And repeat, and repeat, and repeat…