On February 17, the members of House Finance Subcommittee #3 voted 5-2 to lay SB 1408 (McClellan) on the table, effectively ending the chances of passage. As previously reported, SB 1408 would permit any county or city to impose an additional local sales and use tax of up to 1 percent, if initiated by a resolution of the local governing body and approved by voters at a local referendum. The revenues of such a local tax would be used solely for capital projects for the construction or renovation of schools. Any tax imposed shall expire when the costs for capital projects are to be repaid and shall not be more than 20 years after the date of the resolution passed.
Currently, this authority is limited to the qualifying localities of Charlotte, Gloucester, Halifax, Henry, Mecklenburg, Northampton, Patrick, and Pittsylvania Counties and the City of Danville. This bill was a recommendation of the Commission on School Construction and Modernization.
SB 1287 (Deeds), which expand this authority solely to Albemarle County and the City of Charlottesville, was also tabled on an identical vote to SB 1408.
VACo testified in support of both bills.
Though the legislation pertaining to this authority has been tabled in subcommittee, the effort to grant this authority to localities is not yet fully over. The Senate version of the budget contains Item 4-14 #2s, which if adopted by the budget conferees and enacted, would establish the provisions of SB 1408 for the remainder of the biennium. VACo encourages its members to continue to advocate to your legislators on this effort.
Additionally, several other bills and budget items pertaining to school construction financing are still making their way through the legislature. SB 1124 (Stanley) would require the Virginia Board of Education (VBOE) to make recommendations to the General Assembly for amendments to the Standards of Quality (SOQ) to establish standards for the maintenance and operations, renovation, and new construction of public elementary and secondary school buildings. Such recommendations shall include standards for the percentage of the current replacement value of a public school building that a school board should budget for the maintenance and operations of the building and such other standards as the Board deems appropriate. In developing such recommendations, the Board shall solicit the input of relevant stakeholders and the public. The Board shall submit its recommendations to the Chairs of the House Education Committee and the Senate Education and Health Committee no later than December 1, 2023. This bill was also the recommendation of the Commission on School Construction and Modernization and has passed both the House and Senate by wide margins. The bill now heads to Governor Youngkin’s desk.
If VBOE were to recommend and the General Assembly were to add in Code, school building maintenance, renovation, and construction to the SOQs, this would require a determined yearly financial contribution by both state and local governments as currently exists for any other standard contained in the SOQs. Given how JLARC is scheduled to release its report on the SOQ Funding Formula and make recommendations to the General Assembly in June on how to reform the existing system, it will be interesting to see if and how any VBOE recommendations will be included should this bill be enacted.
Lastly, Item 137 #3h, Item 137 #16s, and Item 137 #17s are budget amendments that would modify provisions of the School Construction Assistance Program by adding the principal portion of debt service payments on projects that have not yet been completed as an eligible use; clarify that any project that began construction after July 1, 2022, may qualify for grant funds; allowing the most favorable year among three years of fiscal stress index data to be used to determine the grant award amounts; and require the program guidelines to address joint grant applications for regional school construction projects. Contingent on FY 2023 revenues, the School Construction Assistance Program would also receive an additional $100 in unobligated FY 2023 balances if Item 485 #1s was also included in the final budget. These amendments were requested by VACo and partner organizations to provide additional flexibility in the use of funds.
VACo thanks its members for their continued advocacy on the issue of school construction and modernization. VACo will continue to advocate for this legislation and for other efforts to provide additional tools and financing for school construction and modernization.
VACo Contact: Jeremy R. Bennett