The cost of providing unemployment benefits to hourly school workers during the summer months cost far less than the state expected, meaning school districts won’t see any financial impact from the new law for another year or more.

Last year, Minnesota became the first state to extend unemployment benefits to hourly school workers, including bus drivers, cafeteria workers and paraprofessionals. The bill’s advocates pointed out that other seasonal workers were already entitled to unemployment benefits and argued the change would help school districts retain and recruit workers amid staffing shortages.

State lawmakers allocated $135 million to fund the new benefit based on a high-end estimate of what it would cost in one year. The Minnesota Department of Education received reimbursement claims from districts for just $36.4 million in 2023, leaving $98.6 million remaining for this summer and beyond, according to a recent report to the Legislature.

After the money runs out, school districts will continue to have about half of their costs covered by the state, said Sen. Jen McEwen, a Democrat from Duluth and chair of the Senate Labor Committee.

“The report is great to see,” McEwen said. “This is a benefit that is manageable and affordable, and (that) we should have been doing all along.”