Schools seek more cash for hourly worker summer unemployment pay
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A pot of state money meant to help Minnesota schools start paying summer unemployment to bus drivers, cafeteria staff and other hourly employees is running dry.
Why it matters: Districts are seeking tens of millions of dollars in additional state funding to keep the benefits flowing this summer amid a projected shortfall.
- The ask is just one example of cash-strapped schools seeking more money — or flexibility —from the increasingly cash-strapped state budget.
Catch up fast: In 2023, the DFL-majority Legislature made Minnesota the first state in the nation to pass a law requiring summer break unemployment benefits for non-instructional school employees.
- Supporters said the change would make pay more equitable and decrease turnover for essential staff such as bus drivers, cafeteria staff and para professionals.
Case in point: Cat Briggs, a 67-year-old bus driver for the Rosemount-Apple Valley-Eagan district, told Axios she almost lost her house the first year on the job "because I didn't have enough income" during the summer.
- The SEIU Local 284 member, who ended up washing buses in the summer to make ends meet, said she and many other drivers would have retired sooner without the unemployment benefits.
Follow the money: Lawmakers earmarked $135 million in the two-year budget passed in 2023 to help districts cover the costs of providing the partial summer pay.
- That fund was supposed to last through June 2027 — or until the money ran out.
What happened: Demand — and costs — jumped 40% between 2023 and 2024, with an estimated $56 million in benefits paid out last year, a state survey found.
- Less than half of what's needed to cover the expected costs for this coming summer remains.
What they're saying: While districts were always supposed to foot the bill eventually, some are balking at the prospect, given their own grim financial realities.
- "This either needs to be funded, or the program needs to be reconsidered," Minnesota School Boards Association executive director Kirk Schneidawind told Axios. " Resources are tight and we want to direct as much as we need to our classrooms."
What we're hearing: DFL Rep. Emma Greenman, who spearheaded the original law, told Axios that while she's open to a short-term funding fix, she thinks districts should ultimately figure out how to bake the costs into their budgets.
- "After we passed this bill, it was one of the first times that I can remember where we didn't have a bus driver shortage," the Minneapolis Democrat said, calling it "disingenuous" to "balance our budget on the backs of these workers."
Some legislative Republicans, meanwhile, want to roll back the requirement altogether, leaving it up to individual school districts to decide whether to offer (and cover) the benefits.
Between the lines: School district leaders — and GOP lawmakers — said the change has actually worsened fall staffing shortages for some districts, as retiring bus drivers and others wait until after the summer is over to put in their notice.
Where it stands: Both Gov. Tim Walz's budget proposal and the DFL-led Senate education spending measure allocate another $30 million to help cover this summer's costs, with the Senate's bill adding $70 million for the following fiscal year.
- Lawmakers in the divided House are still working through differences in their education budget bill.
What we're watching: The original law prohibited districts from asking voters for levy increases to cover the summer unemployment costs. That could also change.
- "If the choice is to not have it funded or to have a levy, then we've got to at least have the levy so we can at least have a funding stream," Association of Metropolitan School Districts executive director Scott Croonquist told Axios.
Zoom out: Mandates drive funding debate
The unemployment cash request is part of a broader push by school districts to get the divided Legislature to roll back or cover the cost of mandates passed over the last two years.
State of play: State lawmakers approved a historic $2.2 billion in new school funding in 2023.
- But district leaders say increased costs, staffing shortages and "new expectations, programs, and requirements" from the state have eaten into those funds.
Stunning stat: The Association of Metropolitan School Districts warns that members face a combined budget shortfall of more than $280 million for the 2025-26 school year.
Friction point: Legislative Republicans say years of mandates have put districts in the red, and tied their hands when it comes to passing balanced budgets.
- "The cuts are coming to the classroom, because that's the only place they can make the cuts," Sen. Jason Rarick, a Pine City Republican serving as ranking member of the Senate Education Finance Committee, said at a recent news conference.
The other side: House DFL Leader Melissa Hortman defended the new laws, saying the funding in question was meant to provide critical support for everything from student mental health services to paid sick time for staff.
- "These are policies that have accountability mechanisms and we expect school districts to live up to the same expectations as every other employer in this state," she said.
What we're watching: Districts are also lobbying for a delay of the state's new Paid Family and Medical Leave program, citing high projected costs of payroll taxes and staffing backfills.