Minnesota made school bus drivers eligible for unemployment insurance. Did lawmakers set enough aside?

Like many school bus drivers, Cat Briggs pads out her workweek by taking on extra assignments throughout the day. In addition to delivering kids from home to school and back again in Eagan, Briggs signs up to take them on field trips or haul them across town to attend special tutoring programs.

The habit, Briggs said, is borne of necessity. Work for hourly school employees like bus drivers and paraprofessionals dries up in the summer, which means they have to load up on hours during the school year to survive leaner times.

"Toward the end of the summer, I was kind of scrambling," Briggs said.

A new law tucked into the sweeping 2023 education bill provided relief for hourly workers like Briggs, allowing them to tap into unemployment insurance that pays half their regular hourly wage during the summer. Lawmakers set aside $135 million to pay for the benefit through 2025. But with economic headwinds on the horizon, the program's long-term viability may be in question.

Minnesota lawmakers are expecting a $2.4 billion surplus heading into the next legislative session, which state budget officials suggest saving in order to offset a potential deficit in 2025. The about-face in the state's financial projections is due in part to the ballooning cost of another new program mandated by the education bill: free school meals that will cost $80 million more than legislators forecast this year.

More kids are eating lunch at school than state officials had projected. School board members and district administrators worry a similar story will play out with unemployment insurance.

"With a less-than-positive forecast, that can raise some questions about ongoing funding," said Kirk Schneidawind, executive director of the Minnesota School Boards Association. "Is the state going to make it a priority as we perhaps move into different budget circumstances than we had two years ago?"

Districts paid out about $40.5 million in unemployment benefits in 2023, according to the Minnesota Department of Education.

The Anoka-Hennepin school district paid $1.5 million this summer, according to figures provided by Chief Financial Officer Michelle Vargas. Half of the eligible employees claimed the benefit, which means district officials expect to pay out between $2 million and $4 million next year.

"We don't know for sure, exactly, how it'll play out," said district spokesman Jim Skelly.

St. Paul Public Schools paid nearly $2 million in unemployment, officials there said. They expect costs to top $6 million next year.

Schneidawind said districts suspect few employees took the benefit this year because they didn't know it was available. The education bill passed shortly before the end of the school year, when bus drivers and other workers could begin filing claims.

Still, proponents of the unemployment insurance say it's an essential resource for some of the education system's lowest-paid workers. Chris Stinson, political coordinator for SEIU Local 284, said school employees who work on an hourly basis regularly struggled to find work during the summer.

"Nobody wants to hire you for eight weeks," Stinson said.

That's why the union, which represents 10,000 school employees across the state, lobbied for the change to Minnesota law allowing those workers to claim unemployment during the summer. The argument, Stinson said, was that school employees should be treated like construction workers and other Minnesotans in seasonal fields.

"These workers were being treated differently than any other worker in the state," he said. "It's only a partial wage replacement, but it's meaningful."

Stinson and other backers of the unemployment law say it could prove a valuable retention tool in a high-turnover sector of the state's education system. Officials at First Student, one of the firms that provides bus drivers to several Minnesota districts, said they saw more returning workers this year because of the new law.

Schneidawind said districts should track those retention rates to decide whether it's worth the investment relative to the cost. It's essential that school districts play the long game when it comes to budgeting, he said, since the Legislature sets its spending plans two years at a time.

"I think it's imperative whenever you make a policy choice like this, to evaluate the outcomes and the goals you're trying to achieve," he said.

Briggs, the bus driver, argues the benefit is worth the cost.

"They can't afford to not have the employees, either," Briggs said. "That's the way I see it."