House lawmakers debate future funding for school worker summer unemployment benefits

When the Legislature authorized unemployment insurance for hourly school workers during summers beginning in 2023, it began reimbursing school districts for the costs.

A $135 million appropriation covered the costs for the 2023 and 2024 summers and will cover part of the 2025 summer. Now the House Education Finance Committee is considering HF2210 to appropriate $30 million in fiscal year 2026 — which begins July 1, 2025 — to cover the remaining summer 2025 costs and $70 million in fiscal year 2027 — which begins July 1, 2026 — for the costs during summer 2026.

The bill would also let school districts include the unemployment costs in their local unemployment insurance levy authority beginning in fiscal year 2028.

Hourly school workers told the committee that receiving unemployment insurance during the summer has given them financial stability and improved staff retention. But school leaders warned that levying for the funds will split the state between wealthier school districts that can absorb the cost and poorer districts that won’t be able to pass a referendum.

The committee laid the bill over Thursday for possible omnibus bill inclusion. But Rep. Ron Kresha (R-Little Falls), co-chair of the committee, said legislators have a finite amount of money and the question is going to be whether the state can continue to afford it.

“If we put this on the levies … you are going to divide school districts across this state, pushing this down to school boards who are going to have to have hard conversations with voters,” he said.

To receive the unemployment insurance benefit, an hourly worker has to be looking for a job and their district doesn’t have a comparable job for the worker during summer, according to Rep. Lucy Rehm (DFL-Chanhassen), the bill sponsor. Hourly workers receive half of their pay if they receive the unemployment benefit during summer.

Cat Briggs, a school bus driver in the Rosemount-Apple Valley-Eagan school district, said she now has the same economic benefit as her sons who receive unemployment insurance when they can’t work their construction jobs during the winter. The unemployment insurance is enough to give her a little economic security and gives students stability because hourly staff are returning to work in the fall instead of finding other jobs

If a district can’t levy for the cost, a district’s only option will be to use money from its General Fund at a time when districts are already having to make difficult financial decisions regarding staff cuts, said Denise Dittrich, director of government relations for the Minnesota School Boards Association.

Noel Schmidt, superintendent of the Rock Ridge school district on the Iron Range, pointed out that one in four students in his district has a family member affected by Cleveland-Cliffs’ layoff of 630 workers at two mines that was announced Thursday. The economy of his district means he will have to lay off teachers to pay for staff to not work during the summer.

“I live in one of the poorest places in the state of Minnesota. … I understand that a lot of people have been helped by this. I just want you to understand that this is difficult for folks to pay for.”