One of the most consequential pieces of legislation for rural areas in this year’s General Assembly comes from a legislator in the most decidedly non-rural part of the state — Northern Virginia.
The bill by state Sen. Jeremy McPike, D-Prince William County, would allow localities to hold referendums to increase the sales tax by 1% with the revenues going to schools for construction or renovation.
SB 14, which this week passed the Senate 27-13 and now moves on to the House of Delegates, is part of a 75-year-long quest to figure out ways to help economically distressed rural areas (or, for that matter, economically distressed central cities) keep their schools in good physical shape.
Whether McPike’s approach is the right way to deal with this problem is a matter of political taste, as are all bills, although this one has produced some interesting bipartisan coalitions and might pose an interesting challenge for the governor should it reach his desk, which seems likely.
Before we get to the future, let’s recap the past that has gotten us here.
In Virginia, school construction has historically been a local function, not a state one, although there have been some notable exceptions. The first one came in 1949, when the poor state of Virginia’s schools almost brought down the Byrd Machine. That year Francis Pickens Miller, a former state legislator who had served on Gen. Dwight Eisenhower’s staff during World War II, launched a campaign for the Democratic nomination for governor. This was back in the days when segregationists controlled the party; Miller’s challenge came from the left, and one of his top issues was that the state should help localities with school construction.
Miller came close to winning, close enough that he spooked the eventual winner, Gov. John Battle, into pushing his own school construction program. Through the 1950s, Virginia helped build lots of new schools, many of which are still in operation today. In the late 1990s, there was another push for state help with school construction, led by then-Del. Tom Jackson, D-Carroll County. This was back in the days when there were still such things as rural Democrats. In fact, the political conflict then was primarily between rural Democrats who wanted state aid and Northern Virginia Republicans who didn’t see why that was necessary. One of the most vocal opponents was then-Del. John Rollison, R-Prince William County. In one famous exchange, Rollison said: “We would end up paying for our own schools and also schools in Delegate Jackson’s district. Some members of his caucus walk around with almost a chip on their shoulder. ‘I’m rural. I’m disadvantaged. I need help.’”
Jackson’s proposal then was to use lottery proceeds for school construction. It’s notable that at the time a Republican from this part of Virginia — state Sen. Steve Newman, R-Bedford County — suggested a compromise, namely having some lottery proceeds go toward school construction. Neither idea flew. If they had, Virginia would have spent more than $11 billion on school construction. In the end, the General Assembly in 1998 approved two years’ worth of school construction funding as the Democratic price for supporting Republican Gov. Jim Gilmore’s car tax cut plan.
Now, more than a quarter-century later, that construction funding is long since gone, those 1950s-era schools are even older, and the state’s political poles have switched. The past few years have seen rural Republicans pushing for state funding for school construction, a sign that this isn’t so much an ideological dispute as it is a regional one. For several years, state Sen. Bill Stanley, R-Franklin County, pushed for a statewide bond issue. That didn’t go anywhere. In 2022, Del. Israel O’Quinn, R-Washington County, and then-state Sen. Jennifer McClellan, D-Richmond, pushed through a measure to create a $1.25 billion school construction fund — a sign of how this issue unites otherwise disparate regions. With some other provisions in the legislation requiring local participation, that measure was said to be able to lead to $3.1 billion in total construction.
However, no one has ever pretended that would solve the whole problem. When Bob McDonnell was governor in 2013, his administration calculated that the state had $18 billion in school construction needs. Given inflation, that figure is now likely pushing $25 billion — that was the figure McPike cited in the Senate debate this week, and the Inflation Calculator bears him out.
Realistically, the state is never going to come up with that kind of money.
Another approach that’s been pushed over the years has been giving localities the authority to raise their sales tax through a referendum. Since Virginia is a Dillon Rule state — meaning local governments only have the power granted them by the legislature — that means the General Assembly has to weigh in. So far, it’s done so nine times, giving permission to Charlotte, Gloucester, Halifax, Henry, Mecklenburg, Northampton, Patrick and Pittsylvania counties and the city of Danville. For the past four years, Prince Edward County has been trying to get added to that list as a way to raise money to repair one of its schools. Each time, the bill has died at some point along the way. In last year’s General Assembly, then-Del. Jim Edmunds, R-Halifax County, sponsored the bill, only to have it voted down in a committee controlled by fellow Republicans. So was a bill by McClellan to give all localities that power. Her bill passed the Democratic-controlled Senate before it was killed in the same panel that deep-sixed Edmunds’ Prince Edward County-only bill.
Now, after last November’s elections, Democrats control both chambers, and both bills are back, just with different sponsors. State Sen. Frank Ruff, R-Mecklenburg County, had introduced the Prince Edward County bill (SB146) before he resigned for health reasons; his successor, state Sen. Tammy Mulchi, R-Mecklenburg County, has taken that over. Meanwhile, McPike is sponsoring the statewide measure McClellan had last year. The Prince Edward County-only bill has passed the Senate 27-11; my focus today will be McPike’s statewide bill because of its wider impact.
That bill didn’t draw much attention in the Senate on Monday — about five minutes of discussion, with only one senator speaking against the legislation — but those five minutes and the vote that followed are quite illuminating.
McPike’s argument for the bill: This gives localities a tool they can use, or not use, as they see fit.
The lone senator who spoke up in opposition was state Sen. David Suetterlein, R-Roanoke County. “We all know the sales tax is regressive,” he said.
That’s where things get interesting, because Gov. Glenn Youngkin has proposed raising the state sales tax as part of a tax code overhaul that would see the income tax reduced. Democrats were quick to complain that the sales tax is regressive, something that Suetterlein alluded to. “I appreciate some of the comments from some of my friends who aren’t members of the governor’s party pointing out that sales tax increases hurt working people, and that’s one reason why I have opposed sales tax increases strenuously over and over again. This is something we could do through other means.”
State Sen. Barbara Favola, D-Arlington County, countered that “there is nothing bad about this bill.”
I suspect that’s not how she feels about the sales tax component of the governor’s tax plan. If McPike’s bill passes the House, which it probably will since there’s now a Democratic majority in that chamber, I wonder what Youngkin will make of this. He’s already proposed raising the state sales tax, so he hardly seems to be in a position to make the case that Suetterlein has — that sales taxes are regressive and should be avoided, even through a local referendum.
There are two realities here that come into conflict. Sales taxes are regressive. However, there are also few other ways at present for localities to raise funds for school construction or renovation. Six of the Senate’s 19 Republicans voted for the McPike bill, and it’s notable that five of those are senators who represent rural areas: Travis Hackworth of Tazewell County, Emily Jordan of Isle of Wight County, Tammy Mulchi of Mecklenburg County, Todd Pillion of Washington County and Bill Stanley of Franklin County. The only exception is Danny Diggs of York County.
There were some rural Republicans who voted against the bill, but, with the exception of Diggs, all the Republicans who come from predominantly suburban districts voted against the bill. We saw a similar pattern last year on McClellan’s bill, and this year on the Ruff-Mulchi Prince Edward County-only bill. It’s clear that the problem of how to pay for school construction weighs heavily on rural areas, who often have the oldest schools and certainly have the smallest tax bases to afford construction costs. Those rural counties also often face declining populations, which further complicates funding construction (or anything else), and declining enrollment, which also reduces state funding.
Favola, who served on the state’s school modernization commission, told of touring schools where “our children were sitting in buildings with leaky roofs, toilets not working, and didn’t have good internet because the buildings were old.”
The poster child for such a school remains Prince Edward County Elementary in Farmville, where a leaky roof has left one room unusable. Prince Edward determined that to fix the school would cost $30 million (that was not the most expensive option, by the way), which meant the county would need to raise its property tax rate by a whopping 25.5%. As you can imagine, that prospect was not very appealing to county officials, which is what led to the push for a sales tax referendum on the theory that at least some of that would be paid by people from outside the county who are just passing through.
Prince Edward also faces demographic challenges that are typical in rural communities. The latest population estimates show the county’s population is down 1.5% since the 2020 census, and the latest enrollment projections say the county will lose 7% of its student population over the next five years, which means a reduction in state funding. Meanwhile the formula that determines state funding — the Local Composite Index — shows that Prince Edward County, a county with a median household income of $57,304 and where 58.57% of the students live in poverty, is better able to pay for its schools than Prince William County, where the median household income is $123,193 and 32.69% of the students live in poverty. No, that doesn’t make any sense, but that’s how the formula works.
For now, the forecast doesn’t call for rain over Farmville, but when it does, there will be buckets out to catch the water.
