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For a number of communities, the word used Monday morning was cautious optimism. The Dispatch reached out to a number of town managers and county administrators both here and in the larger region, to get their thoughts on what happens now that SB1307 didn’t just pass the Assembly, but did so in both groups with a clear majority. We’re talking about what’s been referred to as “the sales tax bill” in most areas.

This would give counties and cities the ability to ask their residents if they support a 1% increase in local sales tax, to be applied to school renovations or new construction. And to be clear, even if Gov. Youngkin signs this bill into law, that doesn’t guarantee the sales tax goes up. All that does is give the authority to put it on the November ballot as a question. Residents would have to vote yes in order to give a county that ability. 

So first off, a quick reminder why this is being brought up in the first place. In Virginia, a city or county has to first get permission from the General Assembly, then citizens have to vote on the concept before a sales tax increase can happen.

Currently, eight counties and one city have the authority to increase sales tax to fund school repairs. They include Charlotte County, Gloucester County, Halifax County, Henry County, Mecklenburg County, Northampton County, Patrick County, Pittsylvania County and the City of Danville. That’s it. If you’re not on that list, you can’t bring up a sales tax increase for a vote.

A couple of changes for sales tax

Now this version had a couple changes added, when compared to last year’s edition. Last year’s edition targeted only new construction. This year’s version states that it “may be used for the debt service of such public school capital projects” as already exist. That had been a point of contention, with some representatives claiming their communities don’t need new schools, but they do need help in paying down the existing debt on renovations already made. A second change involved putting a clock on any actual increase. 

“(We) set an expiration date of 20 years after the project is undertaken and the debt is paid,” said State Sen. Creigh Deeds, a member of the Virginia Senate Finance Committee. 

Basically, if you increase your sales tax, you can only do so for a specific project. In neighboring Prince Edward County, for example, supervisors could say they’re paying down the debt for the elementary school renovations already underway. But if that happens, say next year, then the 20 year clock begins. At the end of a maximum of 20 years, the sales tax increase has to end. 

A third change in the bill is merely a formality, but it had been raised during the session that it should be made clear this is for public schools, not private ones, as private schools already fund their projects through tuition. With those two changes, it passed the House 62-33 and the Senate by a 27-12 vote. Our regional delegation was split in how they voted. Newly elected Senate District 10 rep. Luther Cifers voted no, while 9th District Senator Tammy Mulchi voted yes. Mulchi carried the bill last year, on the request of the Prince Edward County Board of Supervisors. House Del. Tommy Wright was listed on the record as not voting, but told the staff immediately after the vote that he had meant to vote no. 

Wait and see 

So what are we waiting on? Well, the question now is what will the governor do. Last year, the bill passed through the House and Senate, only to be vetoed by Youngkin, who had said he didn’t want to raise taxes. Youngkin’s stance was part of the reason Prince Edward didn’t push for the bill or include it in their list of legislative priorities. 

“I think we heard the message from the governor loud and clear that he didn’t want to support additional tax increases,” said Prince Edward County Administrator Doug Stanley. “We had gotten it through the House and Senate (last year), but with the governor still there, it was unclear if anything had changed.” 

Stanley described the sales tax option as another tool in the toolkit, just giving counties and cities a way to increase revenue. Is it needed? Not just in Prince Edward, but multiple school districts across Central and Southside Virginia are dealing with buildings that have long since started to fall apart. The Virginia Commission on School Construction and Modernization last year found that a number of school districts reported crumbling buildings. In fact, more than half of the K-12 school buildings in Virginia are currently more than 50 years old and have been “patched” multiple times, as rural counties in particular don’t have the funds for new construction. 

The commission found that the amount of funding needed to fully replace all of the crumbling school buildings in Virginia is estimated to be $24.8 billion. But in last year’s session, multiple Assembly members from rural districts also pointed out that their areas don’t have many restaurants or shops to generate sales tax, so increasing it wouldn’t help their communities. 

What happens now?

But as we said, now it all comes down to the governor’s decision. 

“We are cautiously optimistic,” Stanley said. “Are we back in the same spot we are last year? With the elementary school project moving forward, I think supervisors would be interested in considering this, if it gets approved by the governor.”