This year, large majorities in both houses of Virginia’s General Assembly passed landmark legislation to extend equal collective bargaining rights to most public-sector workers. The Assembly’s collective bargaining bill proposed replacing Virginia’s Jim Crow-era ban on public employee collective bargaining with a new law affirming public-sector workers’ rights and creating a legal pathway to a union contract for those who choose to unionize. The Assembly bill was poised to put Virginia on a transformative path to narrowing one of the largest public-sector pay gaps in the nation and improving public education and services for all Virginians by reducing crisis-level shortages of educators, first responders, health care workers, corrections staff, and other frontline workers. Strengthening collective bargaining rights is also one of the most powerful policy levers states have available to confront primary economic challenges affecting all workers today: an affordability crisis driven by the failure of wages to keep pace with inflation, growing income inequality, and persistent racial and gender labor market disparities.

Once the Assembly’s bill reached her desk, Virginia Governor Abigail Spanberger had the opportunity to strengthen it or sign it into law. Instead, Governor Spanberger put forward her own heavily amended version of the bill last week, weakening the proposed collective bargaining framework so extensively that her version would lock Virginia into an unstable, ineffective system in which collective bargaining would remain merely “optional” and where employers and workers would remain perpetually uncertain about what rules might apply to them from year to year depending on what appointees of future governors might decide. The governor’s amended bill will now be considered by the Assembly in its one-day veto session this week. Below, we analyze some of the many substantive differences between the Assembly bill and the governor’s bill, as well as the likely economic impacts.

Virginia’s ability to reap economic benefits of collective bargaining will depend on strength of any new law 

EPI has previously analyzed the economic importance of strengthening collective bargaining rights in Virginia, where the state’s long-standing ban on public-sector collective bargaining has suppressed workers’ wages and union membership. Our most recent analysis showed that state and local government employees in Virginia earn, on average, 26.7% less than private-sector peers with similar education and experience. Virginia’s public-sector pay gap is the second highest in the nation while its public-sector unionization rate (at 14.1%) is the fourth lowest, outcomes that our 50-state data show are closely correlated with the strength or weakness of a state’s collective bargaining laws. Recent EPI research further shows that beyond helping states narrow public-sector pay gaps and improve conditions for directly affected workers and the public they serve, stronger collective bargaining laws are highly correlated with widely shared benefits including higher wages, more equitable state economies, and healthier democracies.

State public-sector collective bargaining laws are complex and highly variable. In our prior research, we grouped state laws into three categories based on assessment of whether collective bargaining is:

1) illegal: state law prohibits public employers and unionized workers from entering into collective bargaining agreements.

2) permitted: collective bargaining is “optional” insofar as it is allowed in certain jurisdictions but occurs only if both parties agree to engage in it; whether parties are required to negotiate over wages or other terms and conditions of work is not defined in state law.

3) required: once a group of workers has gone through the process of forming a legally certified union, employers have a “duty to bargain” over pay (at a minimum), and there is a specified process for both parties to follow in negotiating to reach agreements that result in a legally binding collective bargaining agreement.

Currently, Virginia’s collective bargaining law straddles the first two categories: collective bargaining is illegal for units of state government in Virginia, but the state has recently (since 2021) permitted local governments to enact their own collective bargaining systems.

As shown in Table 1, data show that average public-sector pay gaps vary across states depending on the strength of their collective bargaining laws. Virginia’s large public-sector pay gap is an extreme outlier, currently exceeding even the average among all states with the weakest laws (where collective bargaining is illegal).

Table 1 Governor’s bill deletes essential elements of a strong collective bargaining system

Virginia lawmakers now face a choice between two dramatically different visions for collective bargaining: an Assembly bill that would move Virginia into the stronger “required” category, and the governor’s substitute bill that would lock Virginia into the weaker “permitted” category.

The Assembly’s collective bargaining bill includes clear language recognizing the rights of public employees to choose whether to unionize; setting forth consistent rules, timelines, and processes for workers and employers to follow for union elections and contract negotiations; and establishing a new, independent state labor board to support and administer the new framework across all covered state and local jurisdictions. The Assembly bill also has limitations—for example, it falls short of equalizing rights of all public employees by excluding most higher education workers—but it does provide a clear, strong roadmap for implementing a robust, effective collective bargaining system modeled on proven best practices from other states to serve as a solid foundation for Virginia to build on.

The governor’s amended version of the bill weakens all these key elements of the statutory framework proposed by the Assembly and the proposed labor board’s role in enforcing a clear statutory framework. In many important sections of the bill, the governor’s amendments include changing the word “shall” to the word “may”—a critical change that converts entire sections of statutory rules and requirements into mere suggestions, rather than legally enforceable expectations applying equally to all workers and employers. Another repeated pattern throughout the governor’s bill is the deletion and replacement of a host of detailed statutory guidelines with directives that such guidelines should instead by “determined by the board” or that the board “shall adopt regulations” to answer critical questions about workers’ rights and employer obligations in the unionization and collective bargaining process.

Table 2 summarizes just a few of the key differences between the Assembly bill and the governor’s bill. The Assembly bill proposes a framework similar to those successfully implemented in many other states, including statutory language defining the topics parties are required to negotiate over, clear rules for union elections and negotiations procedures, and binding arbitration to ensure that negotiations will eventually conclude with a contract settlement. These standard elements are essential to a strong, effective collective bargaining system that enables workers to have an equal voice at the bargaining table—but the governor’s bill removes all of these elements.

Table 2

The stark contrast between the scope of bargaining as defined in the Assembly bill versus the governor’s bill is especially salient. The strength of any collective bargaining system depends on clear, consistent rules for which topics unions and employers must be willing to discuss in negotiations and which subjects must (or may) legally be incorporated into a collective bargaining agreement. When subjects of bargaining are “permitted” but not required, parties may try to pick and choose what to discuss, one party may refuse to negotiate over matters that are important to the other, and non-mandatory topics are generally not considered as part of arbitration procedures and often therefore never get included in final contracts. Alarmingly, the governor’s bill leaves the scope of bargaining completely undetermined, giving the labor board discretion to determine when and whether it is “appropriate” to require parties to negotiate even over topics as basic as wages.

This change alone would lead us to categorize the governor’s bill as a model for “permitting” (but not requiring) collective bargaining, making it unlikely to significantly narrow Virginia’s public-sector pay gap or achieve other important economic outcomes associated with stronger collective bargaining laws. As shown above in Table 1, workers in states where collective bargaining is “permitted” but not required continue to experience pay gaps far above average (and far greater than in most states with strong collective bargaining laws).

At a minimum, any collective bargaining legislation in Virginia should be measured against the status quo and whether it represents progress toward achieving full and equal collective bargaining for all workers. Here, the governor’s bill falls woefully short and could even represent a step backwards for some workers. At best, the governor’s bill would lock Virginia into a system where collective bargaining becomes “permitted” for more workers than are currently covered by local collective bargaining ordinances. At worst—depending on rules yet to be determined by a future labor board—the governor’s bill could erode existing rights of some local government workers who might find themselves in the future governed by weaker state collective bargaining procedures than those they’ve been able to win at the local level since 2021.

The governor’s bill includes additional significant changes too numerous to cover in detail here. Among other notable amendments that weaken the proposed framework for collective bargaining or its implementation, the governor’s bill:

• delays application of the new law to January 1, 2030, for local governments
• excludes Virginia Port Authority workers from coverage
• maintains exclusion of most higher education workers from coverage (including faculty, professional staff, researchers, graduate assistants, etc.) and specifies that this exclusion extends to health care workers at university hospitals and health care facilities

In the short term, the numerous exclusions, delays, and weaknesses introduced or expanded by the governor’s bill would leave Virginia workers with a limited patchwork of different rights covering different localities and occupations. In the long term, this would create permanent uncertainty about whether and when various rules covering particular groups of workers might be changed by the labor board.

It’s clear that the fight to ensure every employee in Virginia has a voice on the job has only just begun. Collective bargaining is a fundamental right, not intended to be left up to the whims of individual local elected officials or to-be-determined future members of a new state labor board. Collective bargaining is both a labor issue and a civil rights issue, as NAACP Virginia State Conference leaders recently pointed out. Nowhere is this clearer than in Virginia, where the denial of collective bargaining rights to generations of workers is directly rooted in a history of white supremacist backlash against Black worker organizing. Virginia lawmakers still have a chance to enact meaningful collective bargaining legislation in 2026, but doing so will first require rejecting the damaging amendments put forward by Governor Spanberger.

Voucher programs—which use public funds to finance private education—have been sweeping state and federal legislatures over the past few years. These bills are harmful to public schools, especially public schools in rural communities. Yet, this week, the “Keep Public Funds in Public Schools Act” was introduced in the Senate, which would repeal the national private school voucher program passed in the 2025 reconciliation bill, thereby protecting rural communities from these programs. Often framed as “school choice” programs, vouchers give parents the equivalent of per-pupil public school funding to send their child to any private or homeschool program they choose.

But diverting public funds away from public K–12 schools and toward private schools does not guarantee educational opportunities will be expanded for all students—and this is especially true in rural communities. Most obviously, because students in rural communities often don’t have a private school option and therefore cannot use the vouchers, state voucher programs—which are financed by all the taxpayers in a state—amount to an education subsidy for wealthy urban families at the expense of strong public schools. Moreover, for rural areas that can support multiple school systems, voucher programs introduce a potentially large cost for the students that remain in public schools, as any sharp drop in public school enrollment will raise the fixed cost per pupil of running schools. For example, school facilities and staff that are efficient for 1,000 students in a school may no longer be efficient if enrollment were to drop to 800 or 900.

Voucher programs work like this: Parents who wish to send their kid to private school can receive public funding to cover part of the tuition or education-related expenses, rather than paying out of pocket. In states with vouchers programs, this added cost to government of paying for private educational expenses makes a big dent in state budgets—see examples here, here, and here. These programs also often entail fraud and abuse of funds and strip away funding for public schools. As a share of K–12 budgets, voucher spending accounted for as much as 26% in 2025, squeezing public schools of sorely needed funds. Moreover, recent reports have documented accounts of voucher funding getting used for high-end concert tickets and rideshare apps like Uber and Lyft. For wealthy parents in urban districts who were already planning to send their kids to private school, these slippery regulations and extra funding for education expenses are a feature, not a bug, of voucher programs. Vouchers are disproportionately taken up by students already attending private school, compared with those who consider a private school option when voucher laws get passed in their state.

For students in rural areas with no private school option, voucher programs simply mean there is less to spend on public schools, which leads to teacher shortages, fewer educational opportunities, and worse building maintenance. In rural communities with homeschooling or private school options, voucher programs impose an added cost to public education when students transition from public to private school.

We call this cost the fiscal externality of voucher programs, and it is borne by school districts, students, and their families when voucher-driven declines in student enrollment intersect with the fixed nature of many school costs. In rural districts, many key education costs—such as interest on bonds issued in the past, heating, electricity for school buildings, bus drivers, and even some staff—cannot easily adjust to student enrollment declines.

While public schools’ fixed costs do not decline when they lose students to voucher programs, their revenue does. Thus, when students in rural areas take up vouchers to leave public school for private school or homeschool, public schools have less revenue to cover the same level of fixed costs. The costs that can be adjusted—such as supplies or certain personnel—will get forced down due to shrinking school budgets. These variable costs are crucial for effectively educating children, meaning students who remain in public schools will pay the price of voucher program takeup.

This fiscal externality therefore leaves districts unable to deliver the same level of instruction to the remaining public school pupils. When students leave public schools in rural areas with voucher programs, there are fewer resources available on a daily basis to educate kids—fewer teachers and other staff members and fewer curriculum and education supplies. Education quality suffers.

How large is the fiscal externality that voucher programs impose on public schools in rural districts? Take the McComb Local School District in Ohio, which had 627 students in 2022 and is classified as a rural district according to the U.S. Census. Using EPI’s Fiscal Externality Calculator, we estimate that a 5% decline in enrollment would lead to an increased cost of $520 per pupil for the remaining students in the district, or a total of $309,530.

The key assumption is that there is some fraction of schools’ costs that is fixed and can’t be adjusted in the near term when enrollment falls. We assume that instruction and services costs (the cost of teachers and services like transportation, counseling, nurses, and school administrators) can only partially adjust to changes in enrollment. Specifically, we assume that when enrollment declines, instruction costs are only able to adjust by 50% of the enrollment decline, and service costs are only able to adjust by 20%. We assume that capital and building and maintenance costs can’t be adjusted at all. (Users can set their own adjustment rates for their school districts using the fiscal externality calculator here. The method behind this calculation is detailed in our report.)

Under these assumptions, aggregating all the rural Ohio districts using the rural categorization of school districts from the National Center for Education Statistics, a voucher-driven 5% enrollment decline would impose a fiscal externality of just over $206 million on Ohio public schools.

Rural districts have the most to lose when states enact voucher programs. For rural communities, vouchers are not a cost-free policy that simply expands education options for children—they are a subsidy for wealthy urban and suburban families at the expense of strong public schools. Voucher programs also introduce a large potential cost for the students that remain in rural public schools. The public spending declines associated with the introduction of vouchers will reliably cause significantly worse educational outcomes at a time when states should be spending more—not less—on public schools. States that promote voucher programs at the expense of funding for strong public education are signaling that rural students are not a priority.