Just two years after Minnesota became the first state to extend unemployment insurance to school bus drivers, cafeteria workers and teachers’ aids, Democratic legislators are considering eliminating the benefit after summer 2028 to reach a budget deal with Republicans.
The law continues to face stiff opposition from school districts, which say paying for unemployment benefits for hourly school workers takes critical funding away from the classroom while making it harder for them to find workers to fill part-time summer positions.
Advocates say the benefit provides a critical lifeline to workers, who make around $17 an hour on average, while helping school districts retain experienced staff year after year.
The Republican and DFL co-chairs of the House Education Finance Committee on Monday presented a budget agreement (HF1388) that provides additional funding for school districts to pay for unemployment benefits in the coming year but repeals the benefits in four years.
Democrats tried to amend the education budget bill to maintain unemployment benefits for hourly school workers, but the effort failed on a tie vote in the evenly divided committee. The budget was then laid over to be taken up by the House Ways and Means Committee.
House Education Finance Committee Co-Chair Rep. Cheryl Youakim, DFL-Hopkins, called agreeing to eliminate the benefits her “biggest disappointment” during Monday’s hearing and said she hopes they can find a way to retain it going forward.
Setting the repeal date so far in the future means Democrats could reverse course again and keep the benefits going if they win back control of government.
But some Democrats say they aren’t willing to vote for the deal and bank on a strong election in 2026, which means the issue could divide the DFL House and Senate caucuses and become a key sticking point in budget negotiations over the next three weeks.
The Legislature is set to adjourn May 19; they need to pass a budget by June 30 to keep the government open.
The gloomy budget forecast has two Democrats proposing cuts to the paid family leave program slated to begin next year, though a majority of the party continue to oppose rolling back any parts of the sweeping progressive agenda passed in 2023.
More than half a dozen House Democrats held a news conference on Friday with hourly school workers during which they blasted Republicans for demanding a repeal of the benefits long afforded other seasonal workers like those in construction.
“This is a line-in-the-sand moment for Democrats,” said Rep. Emma Greenman, DFL-Minneapolis, who authored the bill in the 2023 legislative session.
Kristen Scott, who’s worked as a special education paraprofessional for 20 years in the Elk River School District, said the unemployment benefits have helped her stay afloat during the summer months, when full-time work in schools is hard to come by.
“It also allows us to continue to come back each year to do the important job of helping all of our children thrive,” Scott said. “Cutting unemployment benefits will force many in my field to seek other full-time jobs, leaving our kids wondering who will be there to care for them year after year.”
School districts haven’t had to pay anything toward unemployment benefits because the Minnesota Legislature created a $135 million fund to cover the costs until 2027 or the funds ran out.
Benefits cost an estimated $45 million in 2023 and $57 million in 2024, according to the Minnesota Department of Education. That leaves about half of what’s expected to be needed to pay for the benefits this summer.
Gov. Tim Walz has proposed shoring up the fund with $30 million for this summer to help districts cover the cost, and a DFL-led Senate proposal would provide an additional $70 million the following year.
After that, school districts would have to factor in the cost of unemployment into their regular budgets.
Greenman said they passed the bill in 2023 with the expectation that school districts would eventually pick up the cost without state aid.
Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our website. AP and Getty images may not be republished. Please see our republishing guidelines for use of any other photos and graphics.
