A historic law passed by Democrats in the 2023 legislative session is now among several issues threatening an on-time finish to the 2025 session.

Republicans propose phasing out unemployment benefits insurance for hourly school workers like bus drivers, school lunch workers and teacher aides. Democrats are fighting the plan and voted down a proposal to bring that issue to the House floor in the education finance bill.

“We as Democrats are going to stand up for workers,” said Rep. Luke Frederick, DFL-Mankato. “We are going to stand up for Minnesotans.”

Minnesota was the first state to pass unemployment insurance for hourly school workers in 2023 when the state had an $18 billion surplus. Now, with a $6 billion projected budget deficit, Republicans say it’s no longer affordable.

“Oh, by the way, for my friends across the aisle. We don’t have the money,” said Rep. Isaac Schultz, R-Elmdale Township.

So far, the unemployment benefit for hourly school workers has cost the state about $100 million. Eventually, the cost of the program will be shifted to local school districts, most of which are already strapped for money.

Rep. Peggy Scott, R-Andover, says this shouldn’t be an issue that derails budget negotiations. “We need to get an education bill off the floor and head into negotiations with the Senate in conference committee so this is gravely concerning and gravely disappointing and I hope they won’t obstruct the end of session,” Scott said.

Democrats said they won’t give up something they fought so hard for in the last budget. “You want to go back and re-litigate what happened in 2023, but our job is to balance this (2025) budget,” said Rep. Mike Howard, DFL-Richfield.

The motion to move the education finance bill to the House floor, which included the phase-out of unemployment insurance, was defeated on an 8-8 tie vote. That means the education bill debate will likely slide to next week at the earliest.

Despite that impasse, Republican House Speaker Lisa Demuth says she remains optimistic the May 19th budget deadline can be met now that the governor is meeting with legislative leaders on a more regular basis.

“The fact the governor has started calling regular meetings is a really good sign of the desire for all of us to come together and work,” she told 5 EYEWITNESS NEWS.