Union leaders are touting what they call an unusually generous package of pay raises for 3,200 teachers in the Anoka-Hennepin school district, but district leaders say the tentative deal — which has yet to be voted on by union members — almost certainly will lead to discussions about staffing cuts.

Under a compromise agreement reached through mediation a week ago, teachers would see average pay climb by 5% in the first year of the new two-year contract and 3% in the second year, both sides confirmed Friday. The deal is retroactive to June 30, when the last contract expired.

Those pay raises would cost the district $35 million more than it had budgeted for teacher salaries over the next two years, district spokesman Jim Skelly said. Anoka-Hennepin received $66 million from the state Legislature last year as part of a $2.2 billion boost for public education, but almost all of the money is needed to fund the various parts of the teacher deal, Skelly said.

Val Holthus, president of the Anoka-Hennepin union, said the "monumental" aid package created an opportunity for the union to negotiate the best contract she can remember. Under the new deal, Anoka-Hennepin teachers would start at $50,000 a year while veterans could earn as much as $100,000 annually.

"We knew that funding was intended for the classroom," Holthus said. "And based on the fact that we have a significant teacher shortage right now, we need to do everything we can to attract and retain teachers." The district currently is down 20 teachers.

Union members will vote on the agreement on Feb. 14 and 15. If members sign off on the deal, the package would go to the Anoka-Hennepin School Board for final approval.

"I think there is a sense of relief that the parties were able to come together with an agreement that the teachers would support," Skelly said.

The budget-busting deal could shape negotiations in dozens of other school districts that still are bargaining with Education Minnesota, the union that represents more than 84,000 school workers across Minnesota. Anoka-Hennepin is the state's largest school district. Both Minneapolis and St. Paul teachers have yet to strike a deal.

Some districts already have agreed to pay increases of as much as 8% this year, according to officials with the Minnesota School Boards Association. Those gains are expected to cause widespread belt-tightening.

"Obviously, people are happy to get the contract settlement, but in the end it will mean having to make budget adjustments going into the future because school districts are required to have balanced budgets," said Scott Croonquist, executive director of the Association of Metropolitan School Districts.

When mediation started in Anoka-Hennepin, the district was offering a 3% raise this year and a 2% raise in the 2024-25 school year, Skelly said. He said the district also agreed to boost its contribution to health insurance by 5% this year. Next year, that contribution will increase another 5% for individuals and 10% for families.

Teachers also are getting a one-time bonus of $750, Holthus said.

One item that was not negotiated: student-teacher ratios. Though the Legislature allowed collective bargaining over class size last year, Anoka-Hennepin leaders did not make any proposals on ratios because leaders want to maintain as much flexibility as they can without being tied to contract requirements, Skelly said.

Killing the new law is a priority for the state school board association, according to the group's website.

Holthus said the union also didn't seek smaller class sizes but instead sought additional pay for special education teachers who spend extra time in the classroom and elementary school teachers who deal with unusually large class sizes.

"Realistically, we would have to have some more school buildings to get significant movement on reducing class sizes, so we came at it a different way," Holthus said.