House subcommittee kills school sales-tax bills

Charlottesville’s plan to invest dozens of millions in public schools conclusively lost one financing source this morning. A subcommittee of the House Finance Committee voted to lay three bills on the table that would have allowed localities to decide if they wanted to raise the sales tax to finance school construction. 

Under current law, localities have to ask permission from the General Assembly to hold a referendum in which community members would decide whether to levy the tax. For the past two years, the Democrats held a majority and legislation passed that put the question on the ballot in Danville and Pittsylvania County. Danville approved a one percent sales tax increase with a 60 percent margin, but Pittsylvania voters rejected the tax on a 33 vote margin. 

The Republicans picked up seven House of Delegates in that same election, giving them a 52-48 advantage. House Finance Subcommittee #3 has seven members, four of whom are Republicans. 

The panel this morning first dealt with SB37 which would add the Isle of Wight County to the list of localities that could hold a sales tax referendum. Senator Tommy Norment (R-3) was the chief patron and he told the Committee that Isle of Wight had a clear plan for how they would spend the revenue. He asked the Committee to allow for a pragmatic solution. 

“I came out of local government and in trying to balance my perspectives sometimes between local government and state government, I reflect,” Norment said. “In this instance, the Board of Supervisors in Isle of Wight unanimously supported it. They cultivated support by working through the Chamber [of Commerce] and the Board of Supervisors and there has not been any outcry of objection within the business community about this.” 

Norment said if Isle of Wight was not granted this avenue for revenue, there would be a 4.5 cent increase on the county’s property tax rate. However, he said he did not support legislation that would grant every locality the ability to hold such a referendum automatically because not all of them might have plans in place. 

“I am adamantly and unequivocally unsupportive of the statewide bill,” Norment said. 

William McCarty is chair of the Isle of Wight Board of Supervisors and said that body has not raised the property tax rate for six years. 

“The bill before you actually allows the citizens to choose by vote how to pay for school infrastructure in the future,” McCarty said. “The one percent in this bill is outlined for that very thing.” 

However, that bill was “laid on the table” which is a parliamentary way of saying it was defeated. 

The vote was four to three, with Delegate Bobby Orrock (R-54) explaining his opposition. 

“Philosophically I don’t like bifurcating sales tax,” Orrock said. “And to the point of what we have before us I will tell you with my inlaws living in Pittsylvania County, if they have a major purchase to make they don’t make it in Pittsylvania County, they go to Campbell because that one percent differential in sales tax if its a major purchase does make a difference in their shopping pattern.” 

Next up was Charlottesville’s specific request for a referendum in the form of SB298 which passed the Senate on a 28 to 12 vote. Senator Creigh Deeds (D-25) is the bill’s patron, which would help finance a proposal to renovate Buford Middle School to add 6th grade as the first step in a major reconfiguration. 

“Unlike a lot of localities, there’s a lot of retail in Charlottesville and they expect to generate $12 million a year which will more than service the debt they need to get the work done,” Deeds said. 

Subcommittee Chair Kathy Byron (R-22) acknowledged that there is a need to address Virginia’s growing school needs, but she could not support this kind of a tax increase, especially when Governor Glenn Youngkin wants to return $4.5 billion in tax payments back to taxpayers. 

“We’re going to have to look at other ways to help localities and to be able to determine how we can do this in a manner that’s beneficial,” Byron said. “We’re trying to return extra dollars at a time that people really need it and it just seems counterproductive to turn around and ask for more.” 

Senator Deeds called the measure “self-help” and said it should be up to local voters to decide whether to raise the sales tax to pay for public school improvements. 

“This is an issue we’ve been talking about the whole time I’ve been here, more than 30 years,” Deeds said. “We’ve got a dribs and drabs approach and we’ve not moved the ball significantly further in all that time.” 

Byron said it was a matter of political differences. 

“You represent an area and they may be in agreement with you,” Byron said. “I represent an area that sends us here to vote to hold back on taxes and they don’t want us to become where we have to put everything in a referendum back to them again. That’s what they elected us to do.”

Delegate Sally Hudson (D-57) is a member of the subcommittee and she pled with her Republican colleagues to support the bill in part because a Virginia study group recommended this approach. (recommendations adopted December 1, 2021)

“We do have a [Commission on School Construction and Modernization] and this tool was unanimously approved on a bipartisan basis by that commission so I don’t think we can argue that this was understudied,” Hudson said. “We know that we need many tools in the toolbox and this is one of them.” 

Both Vice Mayor Juandiego Wade and Mayor Lloyd Snook spoke in favor of the bill as well. 

“Charlottesville desperately needs the authority to pay for a $75 million improvement to Buford Middle School,” Wade said. 

Charlottesville has advertised a tax rate increase of ten cents per $100 to help cover the costs of a growing capital budget. 

“If we were forced to finance this school project through other taxes it will make it impossible in the next decade for us for example to buy a new fire truck or improve police and jail facilities or redevelop public housing,” Snook said. 

Motions to lay on the table are not debatable, and the Charlottesville bill also went down on a 4 to 3 vote despite the testimony.

The final bill was SB472 from Senator Jennifer McClellan (D-9). It would have allowed all localities to proceed with a sales tax referendum. McClellan chaired the Commission on School Construction on Modernization. 

“Forty-one percent of school divisions are at or above enrollment capacity for their current building and twenty-nine percent are nearing capacity,” McClellan said. “Over fifty percent of the schools in Virginia are 50 years or older and that number is growing.” 

Justin Pope has two daughters at Prince Edward Elementary School, which he said is in dire conditions. 

“Our community has had a lot of disagreements but we have consensus, our Board of Supervisors has consensus that this approach to fixing our schools is what we need to do, or at least put to our voters,” Pope said. 

Pope said the alternative was a very steep increase in the property tax rate because real estate assessments are low in Prince Edward. His daughter Eliza also testified in favor of the bill. 

“Yesterday I counted seven buckets in the gym and saw many more leaks around the school,” Eliza Pope said. “I am also aware that there are two classes in the second grade building which cannot be used because of leaks and mold.” 

Byron pointed out that a similar House bill from Delegate Hudson had already been through the committee and it was time to move on. 

After the vote, Hudson addressed Eliza Pope and said this was an example of how government works. 

“You might rightly wonder what happened here today because you came and you shared your story and you did such a good job,” Hudson said. “And a handful of grown-ups who are leaving right now despite  hearing no opposition from any of the other people that we serve chose to vote against that so you might wonder…”

Delegate Byron interrupted Hudson.

“Young people, we think it’s very important that people come and have their voice heard and I want you to note that these Delegates who have to leave have to go see Senators over there who may vote for or against their bill too based on what they think that bill might be. This is how government works. I do support school construction but I just have a different way to get there and I promise Senator McClellan that we’re going to continue those discussions and Senator Norment as well in regards to different ways that we can get funding for our schools.”

Charlottesville’s FY23 will be introduced to City Council on March 7. 

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