Texas Governor Rick Perry on Thursday announced he will not accept the $556 million in federal stimulus money to aid unemployed Texans because it runs counter to state rules and will burden employers.

Speaking at the Bering's Hardware in Houston, Perry said the aid money comes with strings attached from Washington such as requiring the state to assist qualified out-of-work residents seeking part-time jobs. He said the state has been against this benefit because of the potential to discourage them from seeking full-time employment.

Perry also said the fund extends benefits to more low-paid workers, including women, elderly and students resulting in higher unemployment insurance payments by employers.

"Employers who have to pay more taxes have less money to make their payroll" and would have to raise prices on their products, the governor said, according to the Houston Chronicle. When the federal money runs out, business will still have to pay the added cost, Perry said.

Though applauded by business groups, the governor's decision was criticized by Democratic and Republican senators for forsaking tens of thousands of.Texans, who need financial help.

A legislative solution is being mulled by some Democrats in the House of Representatives and Senate to bypass Perry's decision or amend Texas' unemployment eligibility laws and overrule a likely veto by the governor.