Senate committee approves statewide referendum option for 1% school-construction sales tax; incorporates SB874 into SB1307

A Virginia Senate committee meeting in Richmond voted to report Senate Bill 1307 with a substitute that would let any locality place a 1% local sales tax on the ballot for school construction projects, and the panel voted to incorporate Senate Bill 874 into SB1307. The committee approved incorporation by roll call, "Ayes 12, no 0," and later reported SB1307 with the committee substitute by roll call, "Ayes 11, no 2."

The substitute narrows the existing, more limited list of localities eligible for the sales-tax option so that any city or county may pursue the tool, and it includes language intended to prevent supplanting by requiring maintenance of effort for existing education funding. "This simply strikes those and allows any locality or city to utilize this," Senator McPike explained when describing the substitute; he added that the option is subject to voter approval by referendum.

Pulaski County officials and local government associations spoke in favor of the change during public comment. Pulaski County Administrator Mister Sweet told the committee that localities are facing higher construction costs and constrained borrowing capacity: "Pulaski County strongly believes in public education" and the county is making annual debt service payments of about $5,000,000, he said, noting the county's most recent school project cost $49,000,000 and would be north of $60,000,000 "adjusted for inflation" today. Sweet said the county reached a practical ceiling on property tax increases and asked for the same referendum tool available to some other counties.

State and local education groups also urged approval. Jeremy Bennett of the Virginia Association of Counties told the committee the Commission on School Modernization estimates a roughly $25,000,000,000 statewide school-construction backlog and said local tools are necessary "to provide modern facilities." The Virginia Municipal League, Virginia First Cities, the Virginia Education Association and representatives of multiple school divisions and cities also registered support.

Senator McPike and other supporters emphasized that the tax would be enacted only by local referendum. The substitute also includes maintenance-of-effort language intended to keep state and local K‑12 funding from being replaced by newly collected sales-tax revenue. Opponents on the committee recorded two no votes when the bill was reported with the substitute; the transcript does not show additional public opposition during the meeting.

With the committee vote, SB1307 (as incorporated and with the substitute) will be reported to the next stage of the legislative process with the committee's recommendation. The bill as reported allows localities to pursue the 1% sales-tax option only if voters approve it in a local referendum and includes language to preserve existing funding commitments.