A House committee has advanced a bill that would allow localities in Virginia to hold referendums on raising their sales tax to fund school construction and renovation projects.
Bill aims to address school infrastructure needs
The House Finance Committee voted 13-9 on Wednesday to report Senate Bill 472, sponsored by Sen. Jennifer McClellan, D-Richmond. The bill would authorize any county or city in the commonwealth to levy a 1% local sales tax or local use tax to provide revenues solely for capital projects for the construction or renovation of schools – if such levy is approved in a voter referendum.
Under current law, only nine localities are permitted to levy taxes for this purpose: Charlotte, Gloucester, Halifax, Henry, Mecklenburg, Northampton, Patrick, and Pittsylvania counties and the City of Danville.
McClellan said the bill is a response to the over $28 billion in school construction and renovation needs across the state, according to a 2021 survey by the Virginia Department of Education. She said many localities have reached their debt capacity and cannot afford to borrow more money to address their aging school infrastructure.
“This bill is about giving localities a choice, a tool in the toolbox, to let their voters decide if they want to raise their sales tax by a penny to fund school construction and renovation,” McClellan said.
Bill faces opposition from some lawmakers and groups
The bill faced opposition from some lawmakers and groups who argued that it would create a regressive tax that would disproportionately affect low-income and minority communities. They also said it would create a patchwork of tax rates across the state and hurt local businesses.
Del. Mark Cole, R-Spotsylvania, said he was concerned that the bill would allow localities to raise their sales tax without a sunset clause or a cap on the amount of revenue they can generate.
“I think this is a very dangerous precedent to set,” Cole said. “I think it’s going to lead to higher taxes and more spending, and I don’t think it’s going to solve the problem of school construction.”
The Virginia Retail Federation, the Virginia Association of Counties, and the Virginia Municipal League also spoke against the bill, saying it would create administrative and compliance challenges for retailers and local governments, and reduce the state’s share of sales tax revenue.
Bill has support from some localities and education groups
The bill had support from some localities and education groups who said it would provide a much-needed option for funding school capital projects. They said the bill would require localities to hold public hearings and get voter approval before imposing the tax, and ensure that the revenue is dedicated to school construction and renovation.
Prince Edward County Administrator Wade Bartlett said his county has three schools that are over 60 years old and need to be replaced. He said the county would have to raise its property tax rate by 25% to fund the projects, which would be a burden on homeowners and businesses.
“We need this bill to give our citizens a choice,” Bartlett said. “We need this bill to give our children a chance.”
The Virginia Education Association, the Virginia School Boards Association, and the Virginia Association of School Superintendents also spoke in favor of the bill, saying it would help address the equity and safety issues caused by deteriorating school facilities.
Bill heads to the House floor for a vote
The bill passed the Senate on a 21-18 vote on Jan. 31, with two Republicans joining all Democrats in support. The bill now heads to the House floor for a vote, where it will need a majority of 51 votes to pass. If the bill passes the House, it will go to Gov. Glenn Youngkin, who can sign it, veto it, or suggest amendments.
