HB 334 (Rasoul), legislation that once again seeks to grant additional revenue raising authority if approved by local referendum for school capital needs, was passed by the House of Delegates on a broad, bipartisan vote of 70-28 on Tuesday, January 27. VACo testified in committee in support of this long-held priority legislation.
As previously reported, funding for school construction and renovation is one of the biggest concerns and responsibilities of local governments in the Commonwealth and has been almost solely a local responsibility for decades. The condition of the facilities in which children are educated has a direct impact on their ability to learn.
Many localities face significant challenges in raising sufficient funds to undertake these projects. These challenges include over-reliance on real property taxes to generate revenue, which can have vastly different yields depending on the locality and disproportionately burden a subset of taxpayers within a jurisdiction. This raises concerns over equity and diversity of revenues.
HB 334 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, including service of debt for existing projects. As currently drafted, there are slight differences in the debt services provisions of each bill that VACo is aware of and engaged on.
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.
SB 66 (McPike), which is the Senate companion to this bill, has been referred the Senate Finance and Appropriations Committee.
VACo Contact: Jeremy R. Bennett