Jindal rejects La.’s stimulus share

Louisiana’s Bobby Jindal, a Republican, became the first governor Friday to refuse officially a part of his state’s share of the $787 billion stimulus bill, while President Obama warned the nation´s mayors to spend stimulus money wisely.

While some governors were subtly backing off previous statements that they wouldn’t take their share of the windfall, Mr. Jindal issued a statement saying Louisiana would not participate in a program aimed at expanding state unemployment insurance coverage.

“Increasing taxes on our Louisiana businesses is certainly not a way to stimulate our economy. It would be the exact wrong thing we could do to encourage further growth and job creation,” said Mr. Jindal, although the Louisiana legislature could override his decision.

He said accepting the money would have required a change in state law and, after federal money runs out in three years, would have led to a $12 million increase in taxes on his state’s businesses to keep funding the benefit. He also warned other states against the program.

“I strongly suggest that other states also look closely at this provision in the bill so they can also avoid ultimately passing on a significant tax to businesses that will be left paying for this expansion of benefits when the federal money dries up,” he said.

For his part, Mr. Obama told the mayors who gathered in the White House´s East Room that the adminstration will be on the prowl to stop wasteful spending.

“The American people are watching. They need this plan to work. They expect to see the money they’ve earned, they’ve worked so hard to earn, spent in its intended purposes,” he said.

The spending bill includes tens of billions of dollars in aid to states to help them keep government workers on their payrolls, and includes separate lines of money to build road and other infrastructure projects throughout the country.

But besides Mr. Jindal, South Carolina Gov. Mark Sanford and Alaska Gov. Sarah Palin have said federal money may be coming with too many strings attached and may leave the states on the hook to fund the positions and projects when the stimulus money is gone. All three governors are being widely considered as possible 2012 presidential candidates.

“We may reject or accept some or all of the money. We just don’t know at this point,” said Joel Sawyer, communications director for Mr. Sanford. “We’re going line by line to see what’s in there and what isn’t and what strings are attached.”

He conceded it would politically perilous for Mr. Sanford to decline the aid. “It probably will not go over too well if the governor decides to reject some of the money,” Mr. Sawyer said.

On Thursday, Texas Gov. Rick Perry became the first to acquiesce completely, as he accepted Texas’ $17 billion share of the funds.

“I believe there are better ways to reinvigorate our economy and believe [the stimulus] will burden future generations with unprecedented levels of debt,” Mr. Perry wrote in a letter Thursday formally accepting Texas’ share of the funds.

He previously threatened to “look a gift horse in the mouth” with respect to Mr. Obama’s economic rescue.

Mr. Jindal’s resistance to the stimulus prompted blistering attacks from Louisiana Democrats.

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