Dems reintroduce bill to let Virginia localities fund school capital projects through sales tax

Democrats are again pushing for legislation that would allow local governments to hold referenda on increasing their sales and use tax to pay for school capital projects such as construction and renovations.

The party hopes the effort, which has been tried twice before but defeated by Republicans, will be successful now that Democrats are set to control both the House of Delegates and the Senate following the November elections.

“We think with the change in the dynamics in the House that this bill has a very good chance,” said Sen. Jeremy McPike, D-Prince William, adding that a similar version of the bill passed with bipartisan support last year in the Democratic-controlled Senate before dying in the House.

Under current law, only nine localities can impose a 1% sales tax to fund school construction and renovation projects. They are the counties of Charlotte, Gloucester, Halifax, Henry, Mecklenburg, Northampton, Patrick and Pittsylvania and the city of Danville.

Local governments have control over adjustments to their property tax rates — but aren’t allowed to change the sales tax rate without explicit permission from the General Assembly.

In 2021, Virginia invested nearly $1.3 billion into programs distributing grants and loans for school construction after a survey found over half of Virginia’s schools are more than 50 years old, with replacement costs for each in the millions.

“It’s really about empowering localities to make their own decisions about how they want to fund schools, and this is a new tool in the toolbox,” McPike said.

Lawmakers have already set a “precedent of permitting localities to impose a sales tax increase for school capital projects through the referendum process,” he said, “but what the bill would do is essentially allow all localities to make that choice and figure out if that’s the right fit for their community and their community needs.”

Former Republican Del. James Edmunds, R-Halifax, introduced a bill last session to add Prince Edward County to the list of localities allowed to impose a 1% sales tax for school capital projects. However, a House Finance subcommittee failed to hear the proposal.

In 2019, Edmunds successfully carried legislation to add Halifax County to the list of permitted localities.

Republicans have been reluctant to support changes to the law that could allow the raising of taxes, outgoing Sen. Tommy Norment, R-Williamsburg, told the Mercury last session.

If the legislation can make it out of both chambers, the bills will still require approval by Republican Gov. Glenn Youngkin, who could sign them into law, veto them or suggest changes.

This article was reported and written by the Virginia Mercury, and has been reprinted under a Creative Commons license.