"It is two teachers' birthday today" or "It is two teachers' birthdays today"?

I don't see why "it" needs to correspond with the object of possession. It is raining cats and dogs; it is nuts!; it is many days since I last saw my love... "It" coincides with "is", not with what comes after "is"...

But, if you said, "It is Mr. Jones' and Mrs. Grant's birthday today", the singular "birthday" makes sense... so...

The lack of need for number agreement between dummy it and the semantic subject in an extraposed sentence is well documented. Haj Ross has quoted William James as the source of a sentence celebrated in analysis hereabouts:

• It's turtles all the way down.

Although the 'singular form for the singular possession, opinion etc of a group of two or more' principle is also well documented, and, for instance,

• It is our hope that these cases can be treated ...
• It is our contention that many of these cases will be seen to be ...
• It is our aim to make ...
• It is our opinion that ...
• It is Smith and Jones'[s] car
• It is the men's opinion that ...
• It is Smith and Jones'[s] opinion that ...

are unchallengeable,

• It is Smith's and Jones'[s] cars [you can see parked outside]

and the like are equally acceptable.

So both structures suggested are acceptable grammatically. The 'car' examples above show that choice is, as one would expect, in the first instance informed by the actual number of possessions etc. The problem is, are we best considering 'a shared birthday' (we use the actual phrase) as a single, or two, events / days ('We had a lovely day at the seaside') / affairs / notions ...?

I'd say this is not a clear-cut decision to make. Modelling on 'They share a birthday', I think I'd stick with the single celebratory day notion, and hence use

• It is two teachers' birthday today.

But the alternative is perhaps equally justifiable, and if we're hinting at different parties, I'd perhaps opt for birthdays (somewhat metonymically).