When it rains, buckets have to be set out in Prince Edward Elementary to catch the rain. Courtesy of Prince Edward County.

RICHMOND – After rejecting a proposal in former Gov. Ralph Northam’s budget that would fund Virginia’s dire school construction needs with $500 million in grants in favor of a loan-rebate program, House Republicans on Friday voted down several measures that would allow localities to hold referendums on increasing their tax base to pay for school modernization and replacement of their aging school infrastructure.

The most sweeping of these proposals was Senate Bill 472, sponsored by state Sen. Jennifer McClellan, D-Richmond, which would have allowed any county or city in the commonwealth to levy a 1% local sales tax or local use tax to provide revenues solely for capital projects for the construction or renovation of schools – if such levy is approved in a voter referendum.

Under current law, only nine localities are permitted to levy taxes for this purpose: Charlotte, Gloucester, Halifax, Henry, Mecklenburg, Northampton, Patrick, and Pittsylvania counties and the City of Danville.

“I appreciate that there is $500 million on the table in the Senate budget, and a loan program planned that could produce $2 billion, but that’s a drop in the bucket for the over $28 billion in school construction and renovation needs across the commonwealth,” McClellan told members of a Republican-led House Finance subcommittee Friday.

Both the Senate and the House of Delegates approved their individual budgets Thursday. While the Democratic majority in the Senate favors supporting school divisions with $500 million in grants, House Republicans favor a combination of $500 million in state tax funds and money from the Literary Fund to establish a loan-rebate program that would provide up to $2 billion in bonds to help localities repair or replace their aging schools.

However, while the latter proposal would make more money available, the state would pay 30% while localities would have to come up with the remaining 70% – which McClellan said would be impossible for the many localities that have reached their debt capacity and can’t leverage any more loans or bonds. 

“We either are going to have to take on this responsibility fully at the state level, or we are going to have to give the localities the tools they need. Many of them have their real estate taxes as high as they can go, so let’s give them multiple tools to choose from,” McClellan said.

Virginia’s school infrastructure crisis has been decades in the making, but at the start of this year’s legislative session in January there was widespread hope that with a record surplus,

the time had finally come to address this multibillion-dollar challenge in a state in which more than half of public school buildings are more than 50 years old.

In December, the newly formed bipartisan Commission on School Construction and Modernization – chaired by McClelllan – adopted several recommendations for making more grants and low-interest loans available to school divisions, which would benefit especially those in underserved localities that have far less capacity to provide much above the state required minimum for per student expenditures. The panel also endorsed the establishment of a separate fund for school modernization for the state legislature to consider. Allowing localities to levy a 1% sales tax was among the recommendations proposed by the commission.

Keith Perrigan, the superintendent at Bristol Virginia Public Schools and a member of the commission, said on Friday that while the loan rebate program recommended by the House will provide “significant assistance for some schools now and even more schools in the years to come,” there is not a one-size-fits-all solution, which is why he said he was disappointed that the House panel killed these sales tax bills on Friday. 

“Some divisions will benefit from immediate grants of a smaller nature like the Senate has proposed. Hopefully, there is a way that both ideas can be included in the final budget as legislators compromise and try to meet the different needs of divisions across the commonwealth,” Perrigan said.

Besides McClellan’s proposal, which the panel rejected by a 4-3 party-line vote, lawmakers also weighed a measure sponsored by Sen. Creigh Deeds, D-Bath County, that would have added the city of Charlottesville to the list of localities that currently are authorized to impose an additional local sales tax to fund the renovation of Buford Middle School – a $75 million project.

“Our school board has had numerous community input sessions, and our plans are ready to go,” said Vice Mayor Juandiego Wade, a former school board member and past president of the Virginia School Board Association. “We have a robust tourist industry to support this proposal, and without this legislation we would not be able to support other critical issues such as affordable housing, police and infrastructure improvements without a significant tax increase,” Wade said.

. Deeds said that by imposing a local sales tax, Charlottesville could raise $12 million annually that would go towards school construction projects. “This is a self-help type of bill, this money ideally ought to flow through the composite index and go to the people that need it most, that’s why places like Charlottesville have to have this tool, Charlottesville needs to have the ability to raise their own money to fund schools,” he told the committee.

Deeds added that school construction is an issue that has been on the table since he first was elected to the General Assembly more than 30 years ago. “We have not moved the ball significantly during all that time, but now is the chance to let these individual localities decide for themselves,” he said.

In more recent history, the state has conducted four studies to assess the need for capital projects relating to public schools. In 2013, during the final weeks of Bob McDonnell as governor, his administration compiled a list of all the school construction needs in the state totalling $18 billion. More recent data provided by the Virginia Department of Education shows that the total cost to replace schools that are at least 50 years old would carry a price tag of about $25 billion, while another estimate landed on $28 billion.

McClellan said that 41% of Virginia’s schools are at and above their enrollment capacity for their current buildings, and 29% percent are nearing capacity. “Over 50% are over 50 years old, and that number is growing. Many are over 100 years old,” she said. The most common projects involving renovations, McClellan said, are heating, ventilation and air conditioning repair and replacement, grounds and parking lot maintenance. “Teachers right now are coming out of their pockets to paint school classrooms and to address some of the facility needs in our schools,” she said, adding that the House Republicans have taken a contradictory stance on how to fund school construction.

“On the one hand the House has taken the position that this is a locality’s responsibility primarily, and yet we haven’t been giving the localities the tools that they need to address this need,” McClellan said. “This tax was first thought of as one tool in the toolbox if it meets the needs of a locality, if their board of supervisors or city council approves it and if the voters approve it.” 

Senate Minority Leader Tommy Norment, R-James City, has also introduced legislation that would add Isle of Wight County to the list of localities allowed to hold a referendum on levying a sales tax for school construction. 

William McCarty, vice chairman of the Isle of Wight County Board of Supervisors, told the committee Friday that the proposal was simply asking to give his county the same thing that nine other localities have already been given – the opportunity to put a referendum before their residents. 

“We manage our tax dollars well, they’ve been entrusted to us, we are fiscally responsible. Over the last six years, our board has not raised taxes,” McCarty said, adding that the use of the proposed 1% sales tax would be restricted to funding capital school projects. 

“Our governor believes in parents’ choice, we have seen that with masks and other things, and we agree with the governor that parents deserve a choice, so what we are asking is let’s give the parents and citizens in Isle of Wight County the choice for how to pay for school infrastructure, let them make the decision, we believe that is fair,” he said. 

Justin Pope, who addressed the committee with his daughter Eliza, a student at Prince Edward County Elementary School, pleaded with the panel to make sure that the children of his county would not be left behind. “Our community has a lot of disagreements, but we have consensus on our board of supervisors that this approach to fixing our schools is what we need to do, at least to put to our voters to ratify,” he said.

The only other alternative would be to impose “a really crushing 25% real estate tax increase,” which would provide the needed funds to renovate the elementary school. “We do not have the real estate tax base to support that, and the school soon will be unusable and will face an even more expensive complete need to replace it,” Pope said, adding that the per capita income in Prince Edward County is barely half the state average, while the poverty rate is two and a half times the state average. 

“We would like to have that local commitment, we just need your permission to move forward with that, so please look at this through the lens of fairness,” he said. “If this is the system now in place, how is it fair that our poor, rural county does not have the same chance as other parts of Virginia?”

Del. Robert Orrock, R-Caroline, a member of the committee, said that “philosophically, I don’t like advocating for a sales tax,” and that he has voted against every extension of it. “I’m not unsympathetic to your needs, but I hope folks will understand,” he said.

And Del. Kathy Byron, R-Bedford County, the committee chair, said that lawmakers are “trying to return extra tax dollars at a time when people really need it,” and that it would be “counterproductive to turn around and ask for more.”

“I represent an area that sends us here to hold back on taxes, and they don’t want us to put everything in a referendum back to them,” Byron said.

The panel rejected both the Charlottesville and Isle of Wight proposals by the same 4-3 party-line vote as McClellan’s bill.

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Markus Schmidt

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