The Fargo, North Dakota, teachers union and school board have been trying to negotiate a new contract for seven months, but have been unable to reach an agreement, according to WDAY-TV. The school board reportedly offered a nearly 4 percent pay increase, but the teachers did not feel that was enough.

The inability to find a solid ground has led both sides to mediation. The teachers feel that they deserve higher salaries because their healthcare costs are increasing and they are now required to put more money into their retirement accounts, the media outlet reports.

The school board recognized that the costs were growing, but also noted that health costs were going up across the state. Unfortunately the district is short on retirement funds and says that everyone needs to contribute more.

"Unfortunately as much as we think we have high quality teachers and they are deserving it, we simply don't have it in our budget to pay more," Jim Johnson, school board president, told the news source.

The next meeting between the two sides is scheduled for next week. 

Legislators in the North Dakota House have passed a bill that increases mandatory pension contributions to the states’ Teacher’s Fund for Retirement.

The bill, which now goes to the Senate, would increase retirement contributions for both teachers and school districts by 2 percent in both 2012 and 2014, raising the total contributions from 16.5 percent to 24.5 percent.

Lawmakers told the Bismarck Tribune the fund currently has 70 percent of the funding it needs to cover all of its potential costs.

In the Senate earlier this month, lawmakers removed one provision in the law that would have required teachers to pay for some of the increase, instead of allowing the teacher benefits to be part of collective bargaining agreements.

According to the Tribune, 40 percent of school districts across the state pay at least part of teachers’ retirement contributions.

That removal of the CBA restriction was met well by educators. The North Dakota Education Association has said it supports the current version of the bill, which should stabilize the pension fund.