Public Sector Collective Bargaining Could Impose Massive New Costs

by F. Vincent Vernuccio

While local governments in Virginia debate whether to allow public sector collective bargaining, many are already pointing to the high cost of implementing the process.

Fairfax County is forecasting a combined $1.6 million for administrative costs surrounding collective bargaining for both the county and the Fairfax school district, just as a start.

Loudoun County proposed almost $1 million in their planned FY 2022 budget just for increased staffing and overhead. However, with a $2 million funding shortfall some are starting to rethink the proposed expenditure.

The city of Alexandria estimates administrative costs alone will cost between $500,000 and $1 million per year. This amount varies depending on the scope of bargaining and how many individual unions they need to negotiate with.

Since there is no statewide infrastructure set up, each local government will be on its own.

If a Virginia local government passes a resolution allowing collective bargaining, it will need to decide if it’s going to create a labor board or use an appointed labor relations administrator (with appropriate staff). The labor board is necessary to administer union elections, resolve impasses during contract negotiations and adjudicate violations of the ordinance or of the collective bargaining agreement, known as unfair labor practices. All of this will come at a cost.

It needs to be stressed this is not money that will be passed on to the city or county’s workers. These are simply the costs for infrastructure, lawyers and others to administer collective bargaining.

While it is difficult to do an apples-to-apples comparison since most public sector labor board functions are done at a state level outside of Virginia, looking at other state budgets may give an indication of the costs associated with these boards. For smaller localities these costs in the long term may be lower, but all localities allowing collective bargaining will still need to provide many of the same functions as the statewide boards. Additionally, the boards in other states are dealing, for the most part, with established unions. This means they don’t have to administer elections or negotiate first contracts with every new unit, as will need to be done for localities allowing collective bargaining for the first time here in Virginia.

A few examples of labor board costs in other states (and New York City) that run public sector union elections and handle unfair labor practice charges and grievances for public employees are below:

There is no doubt the administrative costs of collective bargaining will be high and the cost to create this infrastructure is not insignificant. When considering allowing public sector bargaining, local elected officials should weigh these costs against how the money could otherwise be spent. Is the cost of bargaining worth potential increases in pay or benefits for public employees, money dedicated to COVID responses and reopening, or worth the cost to taxpayers?

F. Vincent Vernuccio is a Visiting Fellow with the Thomas Jefferson Institute for Public Policy and a Senior Fellow at Virginia Works. A version of this commentary originally appeared on April 16, 2021 in the VirginiaWorks blog. The column is republished on Bacon’s Rebellion with the permission of the Thomas Jefferson Institute.

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5 responses to “Public Sector Collective Bargaining Could Impose Massive New Costs”

  1. Stephen Haner Avatar
    Stephen Haner

    Never heard one minute of discussion of this coming administrative structure and cost as the bill pushed through the General Assembly last year. We’re shocked, shocked….

  2. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    As the author of the post points out, the decision to enter into collective bargaining is optional with each local government. As with any optional endeavor, the governing body should consider the cost.

    1. Stephen Haner Avatar
      Stephen Haner

      It will be very interesting to see which local governing boards have the cojones to say no. Many will move slowly, let others move first, but this will be a big push over the summer. Expect another long bill for the 2022 session getting into the details. Expect them to bury this function in the Compensation Board, already a quite political operation historically.

      1. Dick Hall-Sizemore Avatar
        Dick Hall-Sizemore

        I expect the NoVa localities to exercise the option, as well as Richmond and, maybe Norfolk. I expect Virginia Beach and Chesapeake to say no, as well as Henrico and Chesterfield. I would be surprised if any rural counties would agree to enter into collective bargaining.

        The Compensation Board? That would be a major expansion of the scope of its responsibilities. That agency is not nearly as political as it once was.

  3. I am personally opposed to public sector collective bargaining and will work against it in my home county. However, as long as each locality which opts to allow it is 100% responsible for the associated costs (i.e. no funding whatsoever from state tax coffers) who am I to try to keep NoVa, Richmond, Norfolk, etc. from actively working to turn their locales into unlivable hell-holes?

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