St. Paul teachers are seeking pay increases far beyond those sought in recent years, but the potential funding source they point to is unusual, too: $54 million in new state aid to the district.

They don't have to venture far to know there's success in that strategy.

Union leaders in three suburban districts whose contracts have been eyed with envy by the St. Paul rank-and-file have secured deals worth nearly the same amount of money that their school systems received as part of last year's historic $2.2 billion state investment in schools. That much-heralded boost included funds designated specifically to special-education students and English language learners.

Throughout this bargaining cycle, teachers unions have been angling for a share of that overall investment, saying the pay hikes being negotiated now are an overdue boost to teacher compensation, and in turn, a strengthening of recruitment and retention efforts at a time of morale-sapping shortages. But the handsome packages also are putting districts in an all-too-familiar belt-tightening mode.

"It was really our time," Stacey Vanderport, president of the Mounds View Education Association, said of a new two-year deal awarding raises of 6% this year and 10% in 2024-25.

Teacher salaries vary across districts and include automatic hikes based on levels of education and experience. Mounds View sought to be competitive not only with its peers but also local employers like Medtronic. In St. Paul, annual pay ranges from about $49,000 for a starting teacher with a bachelor's degree to about $102,000 for teachers with a PhD and 20 years of experience.

The compensation packages in the Mounds View, Anoka-Hennepin and South Washington County districts nearly match the increases in state aid for those districts, which includes pots of money that can be easily tapped for raises and others meant for specific uses. But state Rep. Cheryl Youakim, DFL-Hopkins, who chairs the House Education Finance Committee, takes no issue with the size of the compensation packages.

"Just like districts are underfunded, teacher pay hasn't kept up with inflation either," she said last week.

Pressed on whether anything about the deals gave her pause — for example, Mounds View's wages-and-benefits increase costs $17 million, yet the district received only $8 million more in the bedrock per-pupil funding formula — Youakim said some districts have reserves to tap for budget-balancing purposes.

That leaves a greater share of the teacher pay hikes coming out of local coffers.

Tapping reserves, in fact, is the plan in South Washington County, which received $36 million in additional state revenue and settled with teachers at a cost of $35 million. How much the district might have to draw from its rainy-day funds won't be known until spring, said Shawn Hogendorf, a district spokesman.

Playing catch-up

Education Minnesota, the statewide teachers union, trains local leaders in how to access district financial reports to prepare for bargaining. But it says it did not recommend how much of any new funds they should pursue — only that negotiators should think hard about how to win the best deals.

"Educators for the last 20 years have been told to sacrifice," Denise Specht, president of Education Minnesota, said last week. "They've taken freezes with promises that someday we'll make it up to you. Now is the time."

The North St. Paul-Maplewood-Oakdale district reached an agreement with teachers that includes increases of 6% and 4%, but with no back pay for 2023-24. The total cost is about $8 million — compared with the $16.6 million in new state aid it received — but the district still has three other contracts to settle.

"We have a longstanding collaborative relationship with our teacher union," said Superintendent Christine Tucci Osorio, who expects to have to make about $6.7 million in cuts in 2024-25.

Staff reductions also are expected to be considered in the Anoka-Hennepin district.

In January, Val Holthus, president of Anoka Hennepin Education Minnesota, appeared at a rally for St. Paul educators, eager to share news about her union's newly secured deal. The Anoka-Hennepin district, she said, initially offered teachers 1% and 1% raises, "a gift to energize our membership against them," she said, and teachers ended up with 5% and 3%.

"We stuck together, and that's what you need to do," Holthus told members of the St. Paul Federation of Educators (SPFE).

On hand, too, was Greta Callahan, president of the Minneapolis Federation of Teachers. Two years ago, Minneapolis teachers struck, and now they are returning to mediation seeking increases of 8.5% and 7.5%.

Minneapolis school finance officials say the district received an additional $31 million in state aid, and is using $14 million for automatic raises tied to years of experience — this before any contract increases are negotiated and add to its projected deficit.

The St. Paul district notes that while it did receive $54 million in new state funding, it also had to draw $34.4 million in rainy-day funds to balance this year's budget.

SPFE President Leah VanDassor said her union's request for pay increases of $7,500 in the first year and 7.5% were based in part on hiring bonuses offered to new teachers and the 6% increases awarded last summer to some of the district's highest-paid administrators. But the union is willing to come down on its request, she said, if the district offers more in health insurance coverage.

On Feb. 15, SPFE members voted to give union leaders the authority to call a strike.

Statewide, Specht said talks are moving more slowly as educators make their case for needs unique to their areas, but she's encouraged by the progress thus far.

"I believe the contracts we are seeing are a step to improving the lives of staff and improving the working and learning conditions in our schools," she said. "I'm not sure people think these are all home runs, but they're a step in the right direction."