The Legislature appears to be giving to schools with one hand and taking away with the other, and it could prove a huge challenge to school districts in our region. We’ve spoken to two business managers at area schools and they see major financial repercussions from a change currently included in the omnibus education finance bill currently winding its way through the Legislature.
At issue is the payment of unemployment benefits to hourly school staff who typically don’t work in the summer months when schools are on break. That includes folks like bus drivers, food service workers, paraprofessionals, and other aides.
We have no objection to extending unemployment benefits to these workers, many of whom struggle to make ends meet in the summer if they don’t have seasonal jobs to make up the difference. Unfortunately, as currently written, the legislation fails to provide a means for funding this potentially large additional expense for school districts, which could include the unemployment costs of many dozens of employees, even for mid-sized districts. Estimates we’ve heard from area school districts put the potential costs in the hundreds of thousands of dollars range. This could well be a whopper of an unfunded mandate, one that business managers believe will put serious pressure on already tight school budgets.
As we’ve reported recently, while the pandemic may be at an end, its repercussions continue to linger. Think of it as “long COVID,” only for schools rather than patients. The pandemic altered how many families approached education, with more choosing to utilize online options even after schools reopened. Enrollments dipped during the pandemic at many schools, and some, like the St. Louis County School District, have to yet to recover to pre-pandemic levels. Fewer students means fewer state dollars to pay the bills.
To suddenly foist a major new expense on schools in a period of already-stressed budgets, without providing a means to pay for it, is only going to make matters worse.
The Legislature appears to recognize there’s a potential problem. The omnibus bill does require the Department of Education to track the costs of providing unemployment benefits to hourly workers during the summer months and report back to the Legislature by Jan. 15 of each year.
That’s all well and good, but a report provides no guarantee that future Legislatures will opt to reimburse for those additional costs incurred by schools.
The Legislature deserves credit for its consideration of hourly school workers, many of whom tend to be underpaid. It’s a laudable change in priorities that reflects DFL control in St. Paul. Yet, such priorities need to be tempered by reality. Asking school districts to shell out for additional unemployment benefits up front and then wait for possible state reimbursement in the future would be onerous in good times, but it’s particularly stressful at a time when many school budgets are extremely tight. If this provision ultimately leads to school district lay-offs, which is distinctly possible, there will be losers as well as winners as a result of this measure.
At a time when the state has an enormous budget surplus, it’s unreasonable to ask school districts to shoulder the cost of this expanded eligibility for unemployment benefits. The Legislature should include a funding allocation along with this mandate or let school districts levy to cover the cost of the extra benefits. Currently, the measure expressly forbids the use of levy authority to pay for the extra cost of paying out these benefits.
Lawmakers shouldn’t assume increases in the formula funding will make up these added costs. Schools are already dealing with the effects of inflation, be it for food, fuel, new buses, or teaching supplies. At the same time, districts are understandably facing pressure for wage increases as their employees experience similar declines in their buying power.
Perhaps the best approach would be to have the Department of Education and the Department of Employment and Economic Development report back next January on the likely costs of this provision to school districts and provide options for covering those costs. The goal here is worthy, but as currently outlined, this measure takes a shoot first, ask questions later approach, and that puts area school budgets at risk. There’s got to be a better way.