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Fiscal study: expanding unemployment insurance to school support staff could cost Vermont $5.5 million to $16 million annually
Summary
A legislative fiscal estimate presented to the Senate committee put the annual cost of expanding UI to school support staff between about $5.5 million and $16 million, with Minnesota's experience cited as a cautionary example of higher-than-expected uptake.
The Senate Economic Development, Housing & General Affairs Committee on Feb. 20 reviewed a fiscal estimate for a bill (S.37, section 2) that would expand unemployment insurance eligibility to certain school support staff.
Patrick, a fiscal analyst who presented the estimate, told the committee the perennial uncertainty in staffing and seasonality makes final costs variable but that his team's estimate "looks like this could be, like, in the neighborhood of, like, 5 and a half to $16,000,000, annually." He emphasized the range depends on staffing levels, how many positions become eligible, and how uptake changes over time.
Patrick said the cost would not fall on the UI trust fund as a regular trust-fund draw but would largely be borne by school budgets because many school employers are reimbursable employers who reimburse the trust fund dollar-for-dollar for benefits paid. He noted a rule-of-thumb used by some legislative fiscal staff that $12 million to $15 million in new liabilities can move the statewide property-tax rate by roughly one penny, making the fiscal trade-offs relevant to local taxpayers.
Committee members asked for comparative data from other states. Patrick cited Minnesota's recent experience: an initial projection of roughly $38 million annually expanded to an actual FY24 experience of about $57 million, and Minnesota prefunded the expansion with roughly $135 million that now appears insufficient to cover the full multi-year cost.
Senators and department staff discussed definition issues that affect eligibility. Department of Labor staff said the estimate used occupational classification codes (SOC codes) for paraprofessionals and teaching assistants; the staff also recommended consulting the U.S. Department of Education and federal partners to ensure any Vermont definition conforms with federal UI rules for instructional employees.
DOL officials and fiscal staff suggested modeling scenarios tied to the governor's education-reform proposals, noting potential mass-layoff implications if schools reorganize. Senators asked for a follow-up model that includes staffing gaps and potential outcomes of governance changes in the education sector.
Ending: The committee requested written materials and a follow-up hearing with witnesses from Minnesota and with school-district staff and paraprofessionals for testimony. No vote was taken on S.37'section 2 during the Feb. 20 meeting.
