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Sales tax bills pass Assembly, go to Governor for signature

SoVaNow.com / March 04, 2020
Voters in Mecklenburg, Charlotte and other Virginia counties may soon have the right to raise sales and use taxes by 1 percent in their respective localities to fund new school construction.

On Friday, both houses of the General Assembly approved three bills that would allow a select group of localities to impose a penny increase on top of Virginia’s 5.3 cent sales tax. However, voters would first have to give their consent by approving a ballot referendum authorizing the tax.

Three bills in the House of Delegates — HB 200, HB 486, and HB 1631 — are now headed to Gov. Ralph Northam’s desk for his signature after receiving overwhelming support in both houses of the General Assembly. Nearly 80 percent of the House members favored the legislation and 75 percent of state Senators also approved.

The House voted 79-21 for bills to allow Mecklenburg, Henry, Patrick, Pittsylvania, and Northampton counties and the city of Danville to hold sales tax referendums. Together, HB 200 and HB 486 cover Mecklenburg, Henry, Pittsylvania, Patrick and Northampton counties and the City of Danville. Both bills were introduced by Republican delegates, HB 200 by Del. Tommy Wright of Lunenburg, whose district includes Mecklenburg, and HB 486 was authored by Del. Danny Marshall of Danville.

Separate legislation, HB 1631 introduced by Halifax Del. James Edmunds, gives Charlotte County the chance to hold a sales tax vote. Edmunds’ 60th House District includes Charlotte.

The Senate voted were 33-7 for Wright’s bill, 29-7 for Marshall’s bill and 31-9 for Edmund’s bill.

The issue of whether to approve the tax will go before Mecklenburg voters on Nov. 2, date of the 2020 general election for president and downballot races.

Under the enacted legislation, local option sales, if approved by voters, would not apply to goods or services that are not currently subject to the state retail sales tax — such as groceries, medications and vehicle purchases. The tax would sunset in 20 years or at the end of the bond repayment period for financing of school construction.

One reason Mecklenburg County school board trustees, supervisors and other officials have expressed support for a local sales tax is because it would alleviate pressure on property taxes as the primary source of revenue for planned school construction projects.

Previously, County Administrator Wayne Carter estimated that Mecklenburg County would see between $4-$5 million annually in new revenues from a 1-percent sales tax. Such an amount would be more than half of what is needed to cover the cost of borrowing money to pay for upgrades and renovations to the county’s three oldest elementary schools, Clarksville, Chase City and La Crosse.

Last year, Halifax County became the first locality in Virginia to approve a local sales tax for school construction, after the Assembly passed legislation sponsored by Edmunds and it was signed into law by Northam. Halifax County voters backed the sales tax by a 71-29 margin in November. The county is seeking to renovate or replace Halifax County High School, which opened in 1979 and has undergone no major upgrades since.

Mecklenburg officials asked Wright and state Sen. Frank Ruff to introduce companion bills on the county’s behalf after seeing construction cost estimates for the Baskerville secondary school complex rise from $120 million to nearly $153 million in less than a year. County supervisors had initially planned to spend about $150 million to build a new consolidated secondary school campus and renovate three aging elementary school buildings in Chase City, Clarksville, and La Crosse.



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