The House of Delegates convenes for its 2022 session. Photo by Markus Schmidt

RICHMOND – Localities in Virginia are now one step closer to being allowed to return surplus personal property tax revenues to taxpayers after a House panel on Thursday approved a measure that would permit them to do so. 

Under current law, localities may return only surplus real property tax revenues to taxpayers, but the proposal sponsored by Del. Joe McNamara, R-Roanoke County, seeks to correct that. “Many localities have reached out and said ‘we feel that we can reach more taxpayers, we can be fair and more equitable in the distribution if we have the capability to also refund real property taxes,’” McNamara told members of a House Counties, Cities and Towns subcommittee. 

Del. Joe McNamara, R-Roanoke County

He said that one of said localities he was working with was already in the process of doing so when they learned that this is not permitted under current law. “They were quite surprised,” McNamara said. 

The legislation is similar to what both outgoing Gov. Ralph Northam and incoming Gov. Glenn Youngkin proposed amid a record state surplus, McNamara said. “We have a very high revenue situation and where we have the opportunity to give some of that money back to the taxpayers,” he said. 

Steve Ross of the Family Foundation of Virginia also urged the panel to approve McNamara’s proposal. “We have a lot of code that permits localities to raise certain taxes, and every year there is more of them that expands that capability or initiates new taxes they can raise,” Ross said. “So we just think it’s time for localities to be able to return some funds and appropriate them to the hardworking families that overpay, which is what a surplus is, it’s an overpayment.”

The committee passed the measure by unanimous vote. It is now headed to the full committee for approval.

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The Senate Education and Health Committee on Thursday unanimously backed a measure that would require school boards to use unspent leftover funds from the state to finance capital projects. Senate Bill 276, sponsored by Sen. Bill Stanley, R-Franklin County, seeks to ensure that school divisions use any unexpended tax dollars for school construction and modernization. A recommendation by the newly formed bipartisan Commission on School Construction and Modernization last month, the legislation had already been approved by a subcommittee last week.

State Sen. Bill Stanley, R-Franklin County.

Under current law it is at a school division’s discretion to spend their tax dollars how they see fit, but the proposed legislation seeks to change that. “The natural tension that exists between a board of supervisors and a school board is always there, and it is the board of supervisors that appropriates the funds,” Stanley told the panel. “My concern is if the school board has $5 sitting in excess, then in the next year the board of supervisors would cut it. What we want them to do is to collaborate together so we can modernize these schools, especially in rural and underserved areas, and we want them to take it upon themselves to use those monies for school modernization.”  

The committee referred Stanley’s measure to the Senate Finance Committee. 

Markus Schmidt

Markus Schmidt is a reporter for Cardinal News. Reach him at markus@cardinalnews.org.