Minneapolis Public Schools officials say new teacher contract will force cuts next year

Minneapolis Public Schools officials said Wednesday that new contracts with teachers and education support professionals would cost an additional $80 million over two years, widening a projected budget gap and forcing cuts in the coming school year.

The tentative contract agreements with the Minneapolis Federation of Teachers, which still require school board approval, were reached after months of stalled negotiations and a three-week teachers strike in March.

The price, revealed at a school board finance committee meeting Wednesday, would be an extra $53.1 million for the current school year and an additional $27.1 million in the 2022-23 school year.

This year's costs, largely for retroactive salaries, bonuses and overtime pay, will be covered by $24 million saved by unfilled positions and $31.5 million in federal pandemic relief aid, the district said.

But for the 2022-23 school year, $27.1 million in contract costs would need to be offset by budget cuts, the district's senior finance officer, Ibrahima Diop, said at Wednesday's meeting.

"To meet these contractual agreements and their associated costs, we have to find the money somewhere," he said.

The contracts include what the union called "historic wins" securing higher wages for teachers and support staff, more mental health support for students, class-size caps and protections for educators of color.

The union says the new contract offers at least a $2 per hour raise for all support staff. Some would see as much as a $4 per hour increase, giving a "significant number" of educational support professionals the opportunity to make $35,000 a year — one of the union's priorities during negotiations.

The contract for support staff also includes a $6,000 bonus, and those who have worked for the district for at least 10 years would receive an additional $1,000.

Under their contract, teachers would receive a $4,000 bonus and pay raises of at least 2%, according to documents released by the union.

During the strike, the district pointed repeatedly to its projected budget shortfall, saying it could not afford all the union's requests. The district's 2021-22 budget included $935 million in expenses and was balanced using federal pandemic relief funds. The federal government requires that at least 20% of those relief dollars go toward efforts to address student learning loss.

But Diop said the district faces multiple financial pressures.

Enrollment has dropped faster than expected — dipping by 751 students since October, and prompting the district to adjust projections to account for 1,000 fewer students this coming fall compared with 2021.

Fewer students means less money from the state, which doles out funding per pupil. The district projects the enrollment decline, which Diop said is not limited to one area, school or grade level, to mean a revenue drop of $6-10 million.

The enrollment changes, as well as the contract's cost and new staffing requirements — additional school social workers, for example — will require the district to reopen its budgeting process, Superintendent Ed Graff said Wednesday. Inflation has also further stretched the district's finances, he said.

Individual school budgets will be reduced to address the enrollment decrease. And department budgets, including those at the central administrative office, will be cut by 5% for a total of $8 million in savings.

"I know that it's extra challenging and will likely delay hiring, but it's financially responsible to address the significant changes in expenses," Board Member Jenny Arneson said.

Any cuts will be made "under a lens of equity," Diop said, explaining that the vast majority — nearly 85% — of the district's expenses are for staffing.

The school district "needs to demonstrate its commitment to students and their families by prioritizing staff who work directly with kids," said Greta Callahan, teacher chapter president of the teachers union.

"If cuts need to be made, those cuts must start with the many layers of administrators that have been added in the past few years. ... They need to chop the top and invest in our students, not defund them."

The school board's finance committee plans to discuss areas to cut or reallocate funding at its next meeting.

A first reading of the district's budget would come to the board in May with the goal of having a vote on a balanced 2022-23 budget at its June meeting, Graff said.

The St. Paul Public Schools avoided a strike by reaching an tentative agreement with its teachers union the night before a walkout was to begin. The district has not yet released the costs of that contract, and the school board still must consider it.

Staff writer Eder Campuzano contributed to this report.