School funding showdown looms as legislature sends sales tax bill to Youngkin again

For the fourth consecutive year, Virginia lawmakers have sent the governor a bill allowing all localities to impose a 1% sales tax for school construction. Now, all eyes are on Gov. Glenn Youngkin, who has vetoed similar measures before.

Youngkin, who has historically opposed these tax proposals, will once again review the legislation. After the last session, he blocked the measure, citing the state’s existing efforts to fund school construction and concerns over its impact on taxpayers.

Sen. Jeremy McPike, D-Prince William, who sponsored Senate Bill 1307, argues that state funding alone isn’t enough to tackle Virginia’s growing backlog of school construction needs. The bill would give local governments the power to levy a 1% sales tax — if voters approve it in a referendum.

“It’s simply not enough money statewide to deal with the large backlog that’s faced by so many different school divisions,” McPike told the Senate Finance and Appropriations Committee last month. He noted that over a dozen localities are actively pushing the legislation, with others expressing interest.

Since 2019, Virginia has allowed nine localities — Charlotte, Gloucester, Halifax, Henry, Mecklenburg, Northampton, Patrick and Pittsylvania counties and Danville — to implement a similar sales tax for school construction funding. Advocates argue it’s time to expand that authority statewide.

“If we are going to do anything on school construction, it needs to be the same authority throughout the commonwealth,” said Del. Vivian Watts, D-Fairfax, defending the bill on Thursday. “Not picking and choosing a few localities whose back is so up against the wall, who perhaps can least afford it by passing the bill as it originally came before us.” 

Pulaski County is one of the localities calling for action. With inflation, high interest rates, and rising construction costs straining budgets, officials say they have few options left.

County Administrator Jonathan Sweet said Pulaskihas hit its real estate tax ceiling and can’t take on more debt through traditional referendums.

“The price tag of school construction projects now far exceeds the growth rate of county revenues and our borrowing capacity,” Sweet said. “This 1% sales tax option is simply an additional tool in our proverbial toolbox to utilize if we may need it.”   

Senate Bill 874, sponsored by Sen. Travis Hackworth, R-Tazewell, was folded into McPike’s broader school funding bill last month. Hackworth’s proposal aimed to add Pulaski County to the list of localities authorized to levy a 1% sales tax specifically for school construction and renovation projects.

Del. Bobby Orrock, R-Spotsylvania, a longtime critic of the measure, warned that localities opting in could see a reduction in state funding due to the local composite index — Virginia’s formula for determining how education costs are split between the state and local governments.

He also raised concerns about the financial impact on smaller, rural areas.

“I have consistently supported increased funding from the state to our school divisions. I think this is a state responsibility,” Orrock said Thursday.

“We address it currently through the composite index of what local governments know they’ve got to pay. I, therefore, oppose this type of legislation and feel we need to put more money from the state in the pot.”

If Youngkin vetoes the legislation, the fight isn’t over. The Senate has already embedded key provisions from the legislation into its proposed budget amendments, meaning the issue will likely be part of budget negotiations between lawmakers and the administration.

This article first appeared on Virginia Mercury and is republished here with permission. Virginia Mercury is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Virginia Mercury maintains editorial independence.