Home Virginia Politics Virginia School Board Members Weigh Tax Authority

Virginia School Board Members Weigh Tax Authority


Waynesboro High School photo 130203WaynesboroHighSchool_zpsb2f61365.gifIt isn’t a formal proposal just yet, but it could move that direction at the September Legislative Advocacy Conference of the Virginia School Board Association (VBSA). Under the radar, school board members are questioning whether the Virginia Constitution allows the legislature to grant tax authority to school districts.

In a number of conversations that began during the McDonnell administration’s efforts to strangle the budget in order to boast fiscal austerity and have intensified as the effects have manifest, school board members across the Virginia have floated concepts of revenue generation to meet shortfalls that are starving maintenance and operational funding. Because there is no standard for engineering studies and no requirement to maintain a maintenance reserve, there is no practical measure of unfunded liabilities. In the short run, that masks the accumulating real deficit.  

One school board member asked if I believed the Virginia legislature has the authority under the state constitution to grant tax authority to school districts. In Virginia, local jurisdictions generally generate revenue through sales and property taxes. In other states, localities and school districts levy income taxes that are used to augment federal and state funding. Article VII, Section 2 of the Virginia Constitution can be interpreted as limiting the General Assembly’s authority to include school districts in the class of local governments. When addressing boundaries it only specifically mentions counties, cities, and towns. We’ve already had a court case regarding “regional governments.” However the concept of a regional government authorized by the vote of the encompassed counties, cities, and/or towns remains an option. In most cases, school districts align with a single county, city, or town, making this less difficult to accomplish than the broader regional authorities associated with the failed transportation authority.

Also there is nothing to prohibit the legislature from granting existing local jurisdictions the authority to levy an income tax that could be used to augment state funding that is falling behind the real requirements. A special local sales tax with revenues specifically benefiting the corresponding school district is also an option. Barring the General Assembly coming to terms with funding requirements and associated revenue shortfalls, these may be the only answers to the coming financial crisis in many school districts. The practical problem is that board and council members in many local jurisdictions suffer the same illusion of fiscal responsibility that infects the General Assembly.

What is very fortunate is that the state constitution has prohibited the General Assembly from covering revenue shortfalls with lottery proceeds. Those proceeds are designed to enhance the education funding floor described as “the cost of maintaining an educational program meeting the standards of quality prescribed pursuant to Section 2 of Article VIII of this Constitution without the use of distributions from the Fund.” Otherwise that source of funding would have already been raided. Yet, that prohibition may only be another illusion.

Bottom line: School Districts will soon be unable to meet the bottom line without a dedicated revenue stream.

  • Elaine in Roanoke

    For far too long, whenever a recession hits and state funding drops, the General Assembly uses some sources of educational funding as its own bank account to “balance” the budget. The most notorious is the Virginia Retirement Fund, which reached such a dismal state in the Great Recession that even the legislators in Richmond had to funnel more funds into it. Of course, accompanying that was requiring teachers to give back a 5% contribution that localities and the state had been paying for employees, a contribution that replaced years of no pay raises during the 1980-1982 recession.

    Because of the so-called Dillon Rule, localities in the state have no real power to enact significant local taxes beyond property taxes without specific permission from the legislature. At the same time, the state constitution requires the General Assembly to maintain “an educational program of high quality.” Of course, the catch-22 in that requirement is that the Standards of Quality for education are funded, according to the constitution, by the General Assembly, which also apportions such funding between local and state government as it sees fit.

    All this mess means that our state, like others in the nation, maintains dual school systems, segregated by money and social class, excellent schools for the well-to-do and whatever is left over for the poorer parts of the state. All at the same time as the state has pushed more and more of the cost of education onto local government.

    I see only one solution to any of this. People need to vote their self-interest for once and get rid of the dumb##es elected time and time again to go to Richmond and pontificate about their great “conservative values.” (Translation: “I’ve got mine. Who cares about you?”  

  • amber waves

    In Arlington and some Northern Virginia jurisdictions, school boards are struggling not just with operating costs, but with capital costs.

    A combination of aging infrastructure that is 50 to 100 years old that needs replacing…and sustained building to match enrollment growth over many years has resulted in jurisdictions running out of bonding authority to build the seats fast enough to keep up.

    School Boards need to be looking to dedicated revenue streams for capital costs as well. This could mean a combination of

    a)proffers from builders for schools

    b)tax increment financing mechanisms (tifs) for schools…or heavens forbid

    c)public private partnership…. (which I am not keen on).

    anyone have any other ideas?

    with regards to operating costs, the Feds have cut back alot on funding school districts despite instituting unfunded mandates like support for special needs students.  Getting rid of Republikoch representatives and senators in Washington would also be most helpful.