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 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.

Plain-English summary

Delegate Paul Krizek asked the Attorney General whether a Virginia local government, having authorized collective bargaining under § 40.1-57.2, can sign a multi-year contract that obligates the locality to pay specific raises in each year of the contract. The catch is that Virginia local governments operate on annual budgets, and the General Assembly was explicit in § 40.1-57.2(B) that no CBA provision can restrict the governing body's authority to set the budget or appropriate funds.

The AG navigated those two principles. The locality can write the multi-year raise schedule into the CBA. But under § 15.2-2506, no money can be paid out except after an actual appropriation by the governing body. So the multi-year raise schedule is more like a target than a binding commitment. If the council or board of supervisors doesn't appropriate the money in a given year, the raise doesn't happen that year, and the union cannot enforce the raise through litigation.

The opinion sits alongside two earlier 2021 AG opinions on collective bargaining (21-009 and 21-071/21-061), which together establish the framework for how localities exercise the discretion the General Assembly granted them under § 40.1-57.2.

What this means for you

For Virginia city councils, boards of supervisors, and school boards

The opinion holds that a governing body keeps its budget authority even after signing a multi-year CBA. A CBA may describe planned raises across multiple fiscal years, but under § 40.1-57.2(B) it cannot include provisions that restrict the body's authority to establish the budget or appropriate funds. Each year's raise depends on that year's appropriation.

For union negotiators

Under the opinion, a multi-year pay-raise schedule in a Virginia CBA remains subject to annual appropriation: the power stays with the locality over whether to appropriate the required funds each year. The opinion also quotes the AG's caution that, to avoid confusion and litigation over the legislative body's role in appropriations, provisions in statutes and CBAs "must be carefully drafted."

For public employees under a multi-year CBA

The opinion concludes that a multi-year raise written into a CBA is subject to the locality appropriating the money each year. If the governing body does not appropriate the funds for a given year, the opinion's reading is that the raise is not required that year.

For citizens and taxpayers

The opinion rests on § 15.2-2506, which provides that no money is paid out for a contemplated expenditure until the governing body has made an appropriation. The opinion treats that appropriation power as one the General Assembly did not intend a locality to relinquish through collective bargaining.

For local government attorneys

The opinion does not prescribe contract language, but it frames the governing constraint: § 40.1-57.2(B) bars CBA provisions that restrict the body's authority to establish the budget or appropriate funds, and § 15.2-2506 conditions any expenditure on a prior appropriation. The opinion repeats the AG's point that these provisions "must be carefully drafted."

Common questions

Can a Virginia locality bind itself to a multi-year wage commitment?
Only to the extent of annual appropriations. The locality can sign a multi-year CBA describing planned raises, but each year's raise depends on the governing body actually appropriating the money.

What if the locality breaches the multi-year raise promise?
Under the AG's reading, there's no breach in the legal sense, because the appropriation is the locality's sovereign decision each year. The CBA cannot trump § 40.1-57.2(B)'s explicit reservation of appropriation authority.

Does this rule apply to all multi-year contracts?
This opinion specifically addresses collective bargaining agreements under § 40.1-57.2. The principle that no money can be paid without annual appropriation under § 15.2-2506 applies generally to local-government contracts.

Can the union sue for breach?
The opinion implies no, because the CBA can't override the governing body's appropriation authority. Any litigation would have to be carefully framed around contract drafting rather than the appropriation decision itself.

Does this affect collective bargaining for police, firefighters, and other essential personnel?
Yes. The statute applies to all public employees covered by an authorizing ordinance. Essential-service employees have no special bargaining rights under Virginia law that override § 40.1-57.2(B).

What about employee health benefits and other long-term commitments in the CBA?
The same principle applies. Any provision that requires the locality to spend money is subject to annual appropriation. Non-financial provisions (work rules, grievance procedures, recognition) operate differently.

Background and statutory framework

Section 40.1-57.2 (enacted in 2020) authorizes Virginia local governments to engage in collective bargaining. Subsection (B) imposes a clear limit: "No ordinance or resolution adopted pursuant to subsection A shall include provisions that restrict the governing body's authority to establish the budget or appropriate funds." Subsection (C) lets localities create certification and decertification procedures.

Section 15.2-2506 is Virginia's general local-appropriations statute: "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." The exception for county-executive-form counties on capital projects doesn't bear on CBAs.

The AG noted: "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." That's a practical instruction to drafters as much as a legal conclusion.

The two predecessor AG opinions referenced (21-009 in March 2021 and 21-071/21-061 in December 2021) set out the Dillon Rule framework for evaluating CBA design choices. Where the statute "expressly limits the power of a locality, rather than enabling it, the express limitation must be given effect" (quoting 2017 Op. Va. Att'y Gen. 185).

Citations

• Va. Code § 2.2-505 (AG advisory opinions)
• Va. Code § 15.2-2506 (local appropriation requirement)
• Va. Code § 40.1-57.2 (local collective bargaining authority and limits)
• 2010 Op. Va. Att'y Gen. 64
• 2015 Op. Va. Att'y Gen. 144
• 2017 Op. Va. Att'y Gen. 185
• 2021 Op. Va. Att'y Gen. No. 21-009 (March 2021)
• 2021 Op. Va. Att'y Gen. No. 21-071/21-061 (December 10, 2021)

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