Minn. school leaders tell committee paid-leave laws are raising substitute costs, straining budgets

St. Paul — School leaders from large and small districts told the Minnesota House Workforce, Labor, Economic Development, Policy and Finance Committee on Jan. 21 that recent changes to state leave laws are driving higher substitute use, new administrative costs and potential teacher cuts.

“We have a couple that have over 43,000 days,” said Kimberly Lewis, representing the Minnesota School Boards Association, describing large accumulated sick-leave banks that districts are now required to convert or account for under ESST. “Another district has 32,000 days at a monetary value of over $12,000,000.”

Committee members said they convened the hearing to gather concrete examples of how the ESST law adopted in 2023 and changes proposed and enacted in 2024 are affecting districts’ operations and budgets. Testimony from superintendents and human-resources directors emphasized three recurring problems: tracking and administering leave for short-term and substitute employees; increased substitute and vendor costs passed to districts; and uncertainty about how the state’s paid-family medical leave program (PFMLA) will be implemented and funded.

“At STMA, we anticipate an increase of $400,000 in fiscal 2026 to cover additional substitute and payroll costs stemming from the new ESST law and paid leave law,” said Anne Marie Fuqua,…