School construction and maintenance financing legislation overview

February 2, 2021

Many localities continue to face significant challenges raising local funding necessary to undertake school construction and renovation projects. Numerous factors impact the educational achievement of K-12 students, including the state of the facilities in which they are taught. Concern over the physical condition of schools in Virginia is not a recent development and several bills were introduced this session seeking to address an ongoing problem felt by communities across the Commonwealth. VACo supports additional state resources and additional funding options for localities for capital and school construction projects.

As previously reported, during the 2019 General Assembly session, VACo spoke in support of pioneering enacted legislation that granted authority to Halifax County to impose an additional local sales and use tax of 1 percent, the revenues of which would be obligated solely for capital projects for the construction or renovation of schools in the County. The tax would only apply if initiated by a resolution from the Board of Supervisors and approved by a subsequent voter referendum. The Board initiated the referendum, which Halifax County voters subsequently passed in November 2019. This authority was expanded to eight additional localities in 2020.

This year, only one piece of legislation seeks to expand this authority to an additional locality. SB 1170 (Norment) would empower Isle of Wight County to use this tool to help fund any school capital projects initiated by the county. VACo is strongly supportive of the bill and also expanding this financing authority statewide and hopes that the Commission on School Construction and Modernization considers this as a recommendation when it meets. SB 1170 was read a second time and engrossed by the Senate.

In addition to increasing local funding options, VACo is also supportive of legislation that would create additional state resources for counties to build and maintain schools. The Senate printed as engrossed SB 1106 (Stanley), which creates the Public School Assistance Fund and Program, to be administered by the Department of Education, for the purpose of providing grants to school boards to be used solely for the purpose of repairing or replacing the roofs, HVAC, electrical or plumbing systems of public elementary and secondary school buildings in the local school division. The bill permits any school board in the Commonwealth to apply for Program grants but requires the Department of Education to give priority in the award of grants to school boards that demonstrate the greatest need based on the condition of existing school building systems and the ability to pay for the repair or replacement of such systems. In the House, similar legislation – HB 2093 (O’Quinn) – with specific provisions tying funding to the local composite index, was reported by the House Education Committee, 20-2, and referred to the House Appropriations Committee.

SB 1109 (Stanley) provides for a statewide referendum on the question of whether the General Assembly shall issue state general obligation bonds in the amount of $3 billion for the purpose of K-12 school building construction, repair, or other capital projects related to the modernization of school facilities. The results would be advisory only and are intended only to demonstrate the preference of the citizens of the Commonwealth on the issuance of such bonds. The bill provides that the referendum be held at the November 2021 general election. The bill was referred to the Senate Privileges and Elections Committee and is docketed for the February 2 meeting agenda.

HB 1924 (Kilgore) would have permitted localities with local composite indexes of less than 0.2000 and designated as fiscally distressed by the Appalachian Regional Commission or determined to have above-average fiscal stress or higher by the Virginia Commission on Local Government to expend up to 25 percent of the required local effort for basic aid for debt service on school building capital renovation or construction projects. The bill was laid on the table by the House Education Committee’s SOL and SOQ Subcommittee, 5-3.

VACo Contact: Jeremy R. Bennett

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