If a Virginia city or county signs a multi-year collective bargaining agreement that promises annual pay raises, is the locality legally bound to fund those raises every year?

Subject

Local governments may include multi-year employee pay-raise provisions in collective bargaining agreements, but the raises remain subject to annual appropriations.

Plain-English summary

Delegate Krizek asked whether a local government could enter an enforceable multi-year collective bargaining agreement requiring funds for employee pay raises beyond one fiscal year. The AG concluded that agreements may include pay-raise provisions spanning multiple years. Each raise remains subject to the locality's appropriation decision for that year, and the governing body may or may not appropriate the required funds.

Virginia Code § 40.1-57.2(B) prohibits a collective bargaining ordinance from including provisions that restrict the governing body's authority to establish the budget or appropriate funds. Virginia Code § 15.2-2506 says no money may be paid out for a contemplated expenditure until the governing body has made an appropriation. The AG found nothing in the collective bargaining statute showing legislative intent for a locality to give up that power.

The opinion warns that statutes and collective bargaining agreements "must be carefully drafted" to avoid misunderstanding, confusion, and litigation about the legislative body's role. It does not decide whether a union may sue or what contract remedies might be available.

What this means for you

If you negotiate for a locality

The opinion permits multi-year pay-raise provisions while preserving annual appropriation authority. It does not supply contract language or decide a dispute over a particular agreement.

If you represent employees

The AG says a multi-year pay provision remains subject to annual appropriations. He does not determine what remedies, if any, follow from a later funding decision.

Common questions

Can a collective bargaining agreement include pay raises for several years?
Yes. The AG says local governments may include such provisions.

Does signing the agreement obligate a future appropriation?
The AG says the governing body keeps its annual authority to decide whether to appropriate the required amount.

Does the opinion decide whether a union can sue?
No. It warns careful drafting can help avoid litigation but does not resolve any right to sue or remedy.

Background and statutory framework

The opinion reads the collective bargaining limit in § 40.1-57.2(B) together with the general local appropriation requirement in § 15.2-2506. The first protects the governing body's budget and appropriation authority; the second requires an appropriation before local money is paid. Together they allow a multi-year raise schedule without removing annual funding discretion.

Citations and references

• Va. Code § 40.1-57.2(B) (collective bargaining ordinance limit)
• Va. Code § 15.2-2506 (appropriation before expenditure)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: http://www.oag.state.va.us/files/Opinions/2021/21-093-Krizek-Issued.pdf

Original opinion text

Office of the Attorney General
Mark R. Herring
Attorney General

December 21, 2021

202 North Ninth Street
Richmond, Virginia 23219
804-786-2071
Fax 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1

The Honorable Paul E. Krizek
Member, Virginia House of Delegates
2201 Whiteoaks Drive
Alexandria, Virginia 22306

Dear Delegate Krizek:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issues Presented

You ask whether a local government may approve an enforceable multi-year collective bargaining agreement that requires the appropriation of funds for employee pay raises that covers more than a single fiscal year. In the alternative, you ask whether annual appropriations are, at the discretion of the governing body, required to implement any multi-year agreements requiring the expenditure of funds.

Applicable Law and Discussion

Two recent Attorney General opinions addressed § 40.1-57.2 and the use of collective bargaining agreements by localities with respect to the Dillon Rule. While localities choosing to authorize collective bargaining have a scope of discretion under the Dillon Rule, such discretion does not exist where the statute has clearly prohibited certain action by a locality. "In keeping with the precepts of the Dillon Rule, where the General Assembly expressly limits the power of a locality, rather than enabling it, the express limitation must be given effect."

The plain language of § 40.1-57.2(B) prohibits the inclusion of "provisions that restrict the governing body's authority to establish the budget or appropriate funds" in a collective bargaining ordinance. Section 15.2-2506 addresses the budgeting power of local governments and provides in part:

No money shall be paid out or become available to be paid out for any contemplated expenditure unless and until there has first been made an annual, semiannual, quarterly, or monthly appropriation for such contemplated expenditure by the governing body, except that funds appropriated in a county having adopted the county executive form of government for multiyear capital projects and outstanding grants may be carried over from year to year without being reappropriated.

Nothing in the collective bargaining statute indicates that the General Assembly intended a locality to relinquish its power to budget and appropriate funds when engaging in collective bargaining. "To avoid misunderstanding, confusion and litigation over the role of the legislative body in the appropriations process, provisions in statutes and collective bargaining agreements must be carefully drafted." A locality annually appropriates funds for expenditures. If a collective bargaining agreement requires the appropriation of funds for employee pay raises over multiple years, the power remains with the locality over whether or not to appropriate the requisite amount of funds each year.

Conclusion

Accordingly, it is my opinion that local governments may include provisions in collective bargaining agreements that allow for employee pay raises over a multi-year period. However, these pay raises would remain subject to annual appropriations by the locality which may or may not appropriate the requisite amount of funds each year.

With kindest regards, I am,
Very truly yours,

Mark R. Herring
Attorney General