Two Virginia bills that would grant more power to unions would cost the Commonwealth of Virginia millions of dollars, according to the bills’ fiscal impact statements.
House Bill 153, which repeals Virginia’s right-to-work law, would cost Virginia $9 million-$25 million in general revenue funds annually, according to the estimates.
HB 582, which would permit collective bargaining for public-sector unions, would cost several local governments between tens of thousands of dollars and tens of millions of dollars, according to their own estimates.
Repealing right to work
Virginia’s right-to-work law prevents a private sector employee from getting fired based on his or her decision to not join a union. The law does not prevent a person from joining a union or paying dues, but only prevents contracts that would mandate membership.
The fiscal impact statement for HB 153, which was introduced by Del. Lee Carter, D-Manasas, found that Virginia would lose millions of dollars in revenue because companies that would have located to the commonwealth likely would locate to a different state if these protections weren’t in place.
The analysis cited a 2019 Area Development report that showed more than 70 percent of corporate executives and nearly 80 percent of site-selection consultants considered a state having right-to-work laws as “important” or “very important” to their decision-making.
The commonwealth secured about 60 manufacturing and supply chain projects in the past 18 months, which created 8,400 jobs and brought $6 billion in capital investments. Many of these projects would have located to another state if Virginia did not have right-to-work laws, the analysis found, citing the Virginia Economic Development Partnership (VEDP).
Carter’s office did not respond to requests for comment.
Another bill that affects private-sector right-to-work protections is Senate Bill 427, which was introduced by Sen. Dick Saslaw, D-Fairfax. This bill would not allow a person to be fired for refusing to join a union, but it would allow contracts that force nonunion members to pay fees to the union to compensate for the union’s representation. Critics have said that this bill would have the same effect as HB 153.
“There is a lot of misconceptions about agency fees and right-to-work repeal,” F. Vincent Vernuccio, a senior fellow for the nonprofit VirginiaWorks, told The Center Square via email. “Allowing unions to charge agency fees is not ‘weakening right-to-work,’ it is a repeal. Anything that allows unions to get workers fired for not paying or charge them a cent to pay for an unwanted service is a right-to-work repeal.”
Public-sector collective bargaining
HB 582, sponsored by Del. Elizabeth Guzman, D-Dale City, permits collective bargaining for public-sector employees and would increase costs for local governments because of its effect on their workforce. These costs would be associated with additional staffers to negotiate and manage contracts, additional attorneys to handle labor relations and upgrading the payroll system.
Jeffrey Stoke, the deputy county administrator for Prince George County, estimated that this law would cost the locality about $10 million.
“The County would need to hire a legal team with collective bargaining expertise,” Stoke said in an estimate of local fiscal impact statement by the Commission on Local Government. “One wrong word, and you are violating local labor law.
"Unions always ask for great pensions," Stoke added. "It is possible that local governments would be asked to cover pension items beyond [Virginia Retirement System]."
He said that costs would continue to rise to pay for office space for union officials, for bureaucracy to work on the paperwork and higher costs for union contract requirements.
The City of Roanoke estimated nearly $30 million in additional costs.
“Collective bargaining comes at a cost,” the analysis from Roanoke said. “If we only considered the potential additional salary costs, the City of Roanoke would anticipate our regular salaries increasing by [$28,299,698].”
Vernuccio said HB 582 also would negatively impact the private sector.
“The one-two punch of drastically increased costs due to public-sector collective bargaining and making Virginia’s private sector less competitive by repealing right to work could have extremely harmful effects on the state and increase the tax burden on its citizens,” Vernuccio said. “At the end of the day, legalizing public-sector collective bargaining, then greasing the wheels to making unionization easier by taking away the right to a secret ballot for public employees, and also allowing private sector unions to get workers fired for not paying them, is not about helping workers. It is about helping union finances.”
Guzman’s office did not respond to requests for comment.