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For the second straight year, a significant majority of the Virginia House and Senate approved the sales tax proposal, as a funding source for school construction. And for the second year, Virginia Gov. Glenn Youngkin has vetoed the proposal. 

Youngkin had a deadline of midnight on March 24 to veto or sign bills that passed in the 2025 Assembly session. As for the sales tax, he argued that now is not a good time to increase taxes for any reason. 

“This proposal could result in a nearly $1.5 billion a year tax increase on Virginians,” Youngkin wrote in his veto. “Some localities would have a combined sales tax rate of eight percent, with no additional offsets, such as reduced income tax or property tax.” 

Why the push for a sales tax? 

We’re talking about what’s been referred to as “the sales tax bill” in most areas. This would have given counties like Lunenburg 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. All this bill would have done is give cities and counties the authority to put the question on the November ballot, to see if residents approve the extra 1%. 

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.

School construction a worthy cause

Youngkin said school construction still remains a worthy cause, but he’s also not sure counties and cities would use this as additional funding for schools. Instead, he questions if counties would allocate this funding for schools and then reduce what they had already set aside. 

“The revenues from this tax increase are entirely fungible,” Youngkin said. “While the tax is dedicated to school capital costs, such as information technology, the new source of revenues would indirectly release funding for other purposes, supplanting other revenues without necessarily increasing education spending.” 

But Youngkin also pointed out his veto doesn’t mean there’s no new funds for school construction. In his budget amendments, which will be taken up by the Assembly and considered this month in a veto session, include $50 million for school construction grants and loans. This is in addition to the funding he had already proposed in the budget, would mean an extra $610 million available for school construction if the budget gets adopted. 

Youngkin calls for a change

Part of the problem for Youngkin, is a change made in this year’s edition. Last year’s edition targeted only new construction. This year’s version stated 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. 

In his veto, Youngkin wrote this was the wrong way to approach funding new schools. Instead, he encouraged the entire Commonwealth to “pursue a tax policy that unleashes economic development and prioritizes jobs and wage growth through innovative reforms.”

More businesses mean more tax revenue, which translates into more money for schools. 

“These reforms must allow hardworking Virginians to keep more of their money, not less,” Youngkin wrote. “Any proposal that increases the cost of living and the cost of business is not a policy we should pursue.”