George Will's column today draws on some new research by Paul Peterson and Daniel Nadler at Harvard. They find that the higher the percentage of public employee who are unionized, the greater risk investors see of the state defaulting on its bonds, resulting in higher interest rates.
This squares with work by Harvard economist Richard Freeman. It should be pointed out that slight increases in borrowing rates are not trivial, as they result in states paying millions, even hundreds of millions, of dollars more in interest payments. Paying more in interest is not in any way good for states' fiscal health.