Senator Eliot Shapleigh - El Paso, Texas

Ex-New Jersey resident Lynn Simpson had not worked in Texas long enough to qualify for unemployment benefits, but she can use resources at the Workforce Solutions office in Round Rock.

Lynn Simpson is living on the financial edge.

The one-time New Jersey resident moved to Austin last year for its booming job market, and soon landed work as a recruiter for an online college. Now she's unemployed, and her short work tenure in Texas means she's not eligible for unemployment benefits here.

"It shouldn't matter how long you are on your job. You were working, you should qualify for something," Simpson says. Fortunately for her, she still qualified for benefits from New Jersey, as do most of those who've lost jobs in that state.

Most jobless Texans aren't so lucky: Statistics going back to 1976 show that, on average, 22 percent receive unemployment insurance, compared with 35 percent nationally.

The Texas Senate has passed a bill enabling Texas to follow suit so it can take $555 million in federal stimulus money.

But Gov. Rick Perry opposes expanding eligibility for jobless benefits, and the bill has bogged down in the House.

Meanwhile, Texas' unemployment rate continues to climb, allowing the state to receive another $250 million in federal funds to provide — at no cost to the state — an extra 13 weeks of benefits for 70,000 workers whose benefits expire beginning in July.

The Legislature must make a technical tweak in state law to get the money, and some lawmakers want to attach that tweak to the stimulus bill in an effort to move it forward and perhaps even head off a likely Perry veto.

If Texas gets the stimulus money, it will pour it into the shrinking trust fund that pays unemployment checks.

There were 362,837 jobless Texans claiming benefits in April, and since September, the trust fund has dropped by $1 billion. It is projected to reach zero by July without an infusion of cash.

Easing eligibility for jobless benefits, as mandated in the Senate bill, would cost $369 million over the next five years, according to the Texas Workforce Commission and the Legislative Budget Board.

Supporting the bill are key interest groups, including the Center for Public Policy Priorities and the Texas AFL-CIO, and a bipartisan coalition of legislators. Without the stimulus money, they argue, Texas will soon have to levy higher taxes on employers and borrow hundreds of millions of dollars to restore the trust fund.

Opponents, including Perry and some prominent business leaders, argue that expanding benefits would increase employers' tax burdens in years to come, leading to fewer hirings and higher-priced products.

"Take the money and run," Allaway has urgedlawmakers. "There is a time value to this money."

'It pushes me'

Carmen Echeverria is looking for help.

The North Austin resident's husband died of a heart attack more than a year ago. Soon after, she lost her full-time job as a nanny.

Now that she's nearly cleaned out her savings, the Central American immigrant has applied for unemployment to help make ends meet.

The money would make a crucial difference in enabling Echeverria, 52, to keep looking for another job and spare her from losing her car, her biggest worry right now.

"I don't know when I am going to find work," she said in her native Spanish, after a recent visit to the local work force board.

To receive unemployment compensation in Texas, people must be out of work through no fault of their own, must actively search for work every week and be available for full-time work unless they are in a state-approved training program. They must maintain a work search log of their job inquiries — at least three a week — and logs are subject to random review by the Texas Workforce Commission.

The maximum a job seeker can receive is $392 a week; the minimum is $58. The more wages earned during the base period, the higher the benefit. While Texas benefits are in line with the national average, the National Employment Law Project says the efficacy of even generous benefits is undercut in states where only a small minority of those out of work receive them.

Rodney Johnson Sr., a blue-collar worker, has been looking for full-time work since October.His jobless benefits require him to record his job-hunting activities, and that keeps him motivated, Johnson says.

"It helps me get out of the house, it pushes me," Johnson says after a recent visit to the WorkSource, the local work force board for the Austin area. "I'm trying to push myself everyday so I can better myself."

'Out of sight'

In good economic times, the state's unemployment compensation trust fund doesn't get much attention. In bad times, it's a different story.

"It's not a part of the general state budgeting system, so it operates kind of out of sight," says Allaway, who was chief revenue estimator for the Texas comptroller's office in the 1970s and early 1980s. "It kind of takes a crisis before they start thinking about it."

Those crises occur at regular intervals, during economic downturns. Supported by one of the lowest unemployment taxes in the country — three-quarters of Texas employers pay less than $24 per employee per year— the trust fund is capped at 2 percent of taxable wages, or $1.8 billion. According to the National Employment Law Project, the balance as of last June was enough to pay benefits for about six months during a peak recession.

By comparison with other more populous states, the minimum tax per employee ranges from $105 in California to $63 in Ohio to $17 in Florida. (The state tax is in addition to federal unemployment taxes, which average $56 per worker in Texas.)

On May 5, the Texas Workforce Commission reported the trust fund had fallen by nearly $300 million in the previous month alone, to a balance of $662 million. If the state rejects the stimulus money, it will start borrowing from the federal government in July to keep the trust fund afloatuntil a deficit tax on employers kicks in next year.

The tax is assessed when the trust fund dips below a statutory level (currently $857 million) as of Oct. 1. Because unemployment taxes are levied on the first $9,000 of each employee's wages, they can weigh heavily on labor intensive businesses.

"If you think about restaurants and retail and construction, where there is significant turnover, that can add up to big money," Allaway said.

Others say the eventual cost of expanding jobless benefits would jeopardize bragging rights to the state's business-friendly climate.

"It's a bad long term deal for the people of Texas," says Bill Hammond, president of the Texas Association of Business, of the $555 million stimulus money.

Hammond says the state can save more than that annually with cost-cutting measures, including reducing fraud and delaying payment of every claimant's first unemployment check.

That idea is not likely to find favor with jobless claimants, who must already wait three to four weeks after filing their claims before starting to receive their benefits.

As for Simpson, the former New Jersey resident, she regularly checks out online job postings and heads up a local networking group for professional women.

A manager at Macy's before moving to Texas in 2008, she receives unemployment benefits from New Jersey that are $131 a week more than Texas would pay, she says.

"I am grateful," Simpson says. Without that check, "I don't know what would have happened to me. I can still pay my bills, and I know everything is still taken care of."