As State Senator Jennifer McClellan’s final term in the Virginia General Assembly (before she heads off to the U.S. House of Representatives in late February) winds down, she continues to do superb work for her constituents and for Virginians as a whole. Thank you!
Today, the @VASenate passed my SB1408 allowing all Virginia localities the option to increase the local sales tax up to 1% by referendum. Funding could only be used for school construction or renovation. Currently, nine localities have this power. 1/ pic.twitter.com/aA8PneBIMc
— Jennifer McClellan (@JennMcClellanVA) January 23, 2023
McClellan’s School Construction Funding Bill Passes Senate With Bipartisan Support
Legislation Would Enable Localities in Virginia to Utilize Sales Tax Referenda to Fix Crumbling Schools
RICHMOND, VA – Today, the Senate of Virginia passed Sen. Jennifer McClellan’s (D-Richmond) bill (SB 1408) with Sen. Jeremy McPike (D-Prince William) to allow any Virginia locality to fund school construction and renovation through an up to 1% increase in sales tax passed in a local referendum. The bill passed on a 26-10 vote with bipartisan support.
The bill is a recommendation of the bipartisan Commission on School Construction and Modernization, which McClellan chairs. Del. Jeffrey Bourne (D-Richmond) is the chief patron of companion House legislation (HB 2316).
Under current Virginia law, only 9 localities have the ability to propose referenda for local sales and use taxes for school construction: Charlotte, Gloucester, Halifax, Henry, Mecklenburg, Northampton, Patrick, and Pittsylvania Counties and the City of Danville. McClellan’s bill would enable any locality to propose a local sales tax referendum for the sole purpose of school construction. A similar bill (SB 1287) from Senator Creigh Deeds (D-Charlottesville) adding the City of Charlottesville and Albemarle County to the list also passed the Senate on a 27-10 vote.
“SB 1408 will provide a critical tool for localities to fund school construction and modernization,” McClellan said. “We must provide new funding options for local school divisions to address Virginia’s crisis of crumbling schools. I’m pleased to see this bill pass the Senate with strong bipartisan support, and I urge House leaders to allow a full House vote on this bill from the bipartisan School Construction and Modernization Commission.”
More than 1,000 schools — more than half of K-12 school buildings in Virginia — are more than 50 years old, according to the Commission on School Construction and Modernization. The Commission estimates that the amount of funding needed to replace these buildings is $24.8 billion. Many localities face significant challenges in raising sufficient funds to undertake these projects.
“Funding for school construction and renovation is one of the biggest concerns and responsibilities of local governments in the Commonwealth,” said Dean A. Lynch, Executive Director, Virginia Association of Counties. “We appreciate the work of Senator McClellan, Senator McPike, and the Commission on School Construction and Modernization to address this issue. Expanding statewide the authority of local governments to raise dedicated funds with the consent of their communities for school renovations and construction would provide another tool in the toolbox of local governments and go a long way towards addressing this critical responsibility and need.
“VACo strongly supports SB 1408, which would grant special taxing authority to counties and cities to impose an additional local sales and use tax of up to one percent, if initiated by a resolution of the local governing body and approved by voters at a local referendum, the revenues of which would be used solely for the capital projects for the construction or improvement of schools.”
In December 2022, the Commission on School Construction and Modernization recommended seven measures to address Virginia’s school construction and maintenance needs, including the sales tax proposal. Several of the recommendations have been introduced as legislation or budget amendments in 2023, including:
- SB 1045 (Sen. McPike) / HB 1694 (Del. Simonds): Requires local school boards to establish a school building maintenance reserve target of at least 1.5 percent of the replacement value of a building in order to avoid major replacement costs in the future. This must be included in any multi-year capital improvement plan or similar document.
- SB 1124 (Sen. Stanley) / HB 2307 (Del. Simonds): Directs the Board of Education to make recommendations to the General Assembly for revisions to the Standards of Quality to establish standards for operations, maintenance, and new construction of public school buildings. The bill requires such recommendations: to include standards for the percentage of the current replacement value of a public school building that a school board should budget for the maintenance and operations; to solicit the input of relevant stakeholders and the public; and to submit its recommendations to the House Committee on Education and the Senate Committee on Education and Health by December 1, 2023.
- School Construction Assistance Program budget amendment (Sen. McClellan): Allow the Board of Education to use a multi-year review of local composite index and fiscal stress when determining grant award amounts to school divisions under the School Construction Assistance Program. Currently, only the latest composite index and fiscal stress data are used in determining the grant amounts. This amendment also allows School Construction Assistance Program grants to cover projects that have begun after July 1, 2022, and to cover the principal portion of future debt service payments on projects that have not yet begun.
- School Construction Funding budget amendment (Sen. McClellan): Includes additional funding of $2.5 billion in the appropriation act for school funding: $500 million for direct aid through the School Construction Grant Program and $2 billion for competitive grants through the School Construction Assistance Program.
McClellan authored the legislation in 2020 that created the Commission.