Florida is on the verge of forfeiting more than $1 billion in federal stimulus funds that could help 250,000 Floridians whose unemployment benefits are running out.

The problem: The federal offer for aid comes at a price that many in the state Legislature are unwilling to pay. To receive the money, the state would have to pass a new law widening the pool of people receiving extended unemployment benefits.

So far, no legislation has been introduced. The federal government would pick up most of the estimated $776 million cost of providing the extended benefits through December 2009.

But since state agencies and local governments account for about 6 percent of benefit costs, they would be on the hook to pay about $71 million between now and June 30, 2010. Moreover, the federal stimulus only runs through the end of the year. After that, the burden would shift to Florida to pay for the program. That tab could be about $200 million for the second half of the 2009-2010 fiscal year, according to an estimate from the Florida Agency for Workforce Innovation, which oversees unemployment benefits.

Senate Republicans, led by Sen. J.D. Alexander of Lake Wales, do not want to leave the federal money on the table, given Florida's rising unemployment.

The state's unemployment rate stood at 8.1 percent for January and is expected to be higher when February numbers are released on Friday. However, top House Republicans are urging their membership to reject the federal funding.

''The strings attached to this money are strings that could make the situation worse,'' said Republican Rep. Adam Hasner of Delray Beach, the House Majority Leader. ``Businesses could lay off more people. This isn't an issue about being callous or compassionate. It's about not making a short-term decision that could have long-term consequences.''

On Monday, the House leadership sent an e-mail to members telling them how to respond if constituents are upset that the state would turn down more than $1 billion in aid. The e-mail said taking the money now would mean a hardship later for Florida companies that pay into the state's unemployment insurance fund.

''These higher costs on businesses that will directly pay the increased taxes, will force companies to layoff workers, potentially causing more Floridians to lose their jobs,'' the e-mail read. ``As you can see, utilizing the federal money for unemployment compensation is not a silver bullet.''

Tammy Perdue, general counsel of business lobbying group Associated Industries of Florida, is concerned the state would be on the hook to pay out at least an additional $74 million annually in unemployment benefits if it amends its laws to get the federal money. ''We don't believe the pot of money is really worth that long-term exposure,'' Perdue said.

Among those seeking the federal dollars is John Hall, executive director of the Florida Center for Fiscal and Economic Policy, which analyzes the impact of budgetary decisions on low and middle-income Floridians.

''Yes we should take the money,'' Hall said. ``Economically it makes sense.''

He cited studies indicating that for every dollar spent in unemployment compensation, $2.15 is returned into the economy. Plus, Hall said, eventually the state will need to charge businesses higher unemployment insurance taxes to bolster the fund used to pay unemployment benefits.

According to the National Employment Law Project, Florida is one of 14 high-unemployment states that has yet to act in order to receive the federal injection of extended benefits.

''Over half a million jobless workers will run out of unemployment benefits in March and April if their states do not act now,'' said Christine Owens, executive director of the project.

If adopted by Florida, the stimulus program could provide up to 20 additional weeks of unemployment benefits to up to 250,000 people who would otherwise use up their benefits this year if they continue to have trouble finding a new job.

The state estimates a further 112,800 people could become eligible for benefits in the second half of the fiscal year, between Jan. 1 and June 30, 2010.

The estimated $1.1 billion in federal help is separate from another $1.34 billion to help Florida's jobless that doesn't require legislative approval.

Part of those funds are going toward a $25 increase in unemployment benefits until 2010. All told, Florida has about 500,000 people receiving unemployment benefits. Underscoring the gravity of the economic crunch is that the state's trust fund used to pay unemployment claims is quickly approaching insolvency.

Gov. Charlie Crist on Wednesday said he will seek an interest-free loan from the federal government for about $600 million for three months to shore up the unemployment insurance trust fund.

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