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Charlottesville board, lawmakers briefed on plan to boost sales tax in order to pay for reconfiguration

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A potential sales tax increase to pay for school construction projects in Charlottesville has the backing of two area lawmakers.

The Charlottesville School Board met with Del. Sally Hudson, D-Charlottesville, and state Sen. Creigh Deeds, D-Bath, on Thursday to discuss that plan and its reconfiguration project, which includes a $73 million expansion and renovation of Buford Middle School. As part of the project, sixth-graders would move to Buford and fifth-graders would go back to the elementary schools. Walker Upper Elementary, where those two grades are currently, would then be turned into an early childhood center.

Improving the learning spaces and moving the grades around would improve student learning and the middle school experience, those involved with the project have said.

One way the city could bring in more money to pay for that project and other school construction would be to levy a general retail sales tax at a rate of 1%, which would bring in about $12 million a year and expire after 20 years. All that money would have to be used for school construction projects.

But, the city would need permission from the General Assembly and then local voters. That’s where Hudson and Deeds come in. Both would have to support legislation giving the city authority to ask voters about the sales tax rate increase.

The city and school board have talked about the special sales tax, but Thursday’s meeting was the first in-depth conversation about it. The General Assembly will convene next month.

The special sales tax is the top legislative priority for the school division. Other priorities include speeding up the timeline for Child Protective Services background checks, which are currently taking weeks to come back and delaying an employee’s start date, and support for COVID-19 mitigation measures.

“I’m confident we’ll support your request,” Deeds said of the special sales tax, adding that some senators might oppose it in favor of a statewide solution. “… The position I take is that we can’t wait for a statewide solution. We’ve got to be able to address it where we can and when we can. This will give the voters of Charlottesville the ability to say we want to support the schools with an extra penny.”

The state Commission on School Construction and Modernization has recommended giving all localities the authority to impose an additional sales and use tax if initiated by a resolution by the local governing body and approved by the voters.

That was one of several recommendations from the commission to the General Assembly about how the state can assist school systems with replacing or renovating school buildings. More than half of the school buildings in the state are more than 50 years old, according to information presented to the commission over the summer. Replacing those buildings over 50 years old would cost nearly $25 billion, according to that same presentation.

School divisions and localities are largely dependent on local revenue to pay for construction projects. The state does provide low-interest loans to school divisions for construction projects through its Literary Fund, but those loans are capped at $7.5 million for a single project.

Halifax County was the first locality to implement a special sales tax to pay for school projects after 71% of voters approved that increase in 2019. Since then, eight other localities have done so.

Hudson said that she has drafted two bills on the issue — one that would give all localities the authority and another that’s Charlottesville-specific.

“I think that our top priority should be getting the project done and if we can solve the statewide problem at the same time, that’s all to the good,” she said. “We are sort of keeping an open mind until some of the other pieces fall into place in Richmond with new leadership especially in the house.”

Without the sales tax, city budget officials have said that the City Council would need to raise the real estate tax rate by at least five cents to pay for the first $75 million phase. The real estate tax rate is currently 95 cents per $100 of assessed value and has not changed since 2008. In fact, the city has not raised the tax rate since 1981, according to Cvillepedia.

“Real estate taxes alone aren’t going to cut it,” Knox said.

In the presentation, Knox and VMDO notes that a shortage of affordable housing is a major issue facing Charlottesville and the state, and that potentially increasing the cost of housing by increasing real estate taxes could make the problem worse.

The City Council signed off on the broad plan for reconfiguration in October and will decide in the spring whether to fund it.

Even with the real estate tax rate increase, officials have said that paying for the first phase would exhaust the city’s debt capacity and limit the city’s ability to start new capital projects for several years.

VMDO has worked over the summer and fall to come up with a plan for reconfiguration, including early cost estimates. Currently, VMDO is working with school employees to flesh out the building plans.

The buildings themselves, which opened in 1966, are inadequate to meet the needs of students, officials have said. The current buildings have noisy HVAC units and inaccessible front entrances. They also get little natural light, and let in moisture, dirt and pollen.

“We’re grateful that you’re both supportive of that and look to do whatever we can to be supportive of any legislation that you all are putting out,” said school board chairwoman Lisa Larson-Torres. “If you need us to show up or do anything, please let us now.”

Hudson suggested the school board members work with other school systems to support the special sales tax.

“I think the most helpful thing is for us to be able to stand up and present the bill and say this has the support of the following localities and for that group of communities to sound wide and deep and like it comes from all sorts of places around Virginia,” she said.

Deeds said that any bill that’s passed by the General Assembly still needs to be signed by Gov.-elect Glenn Youngkin, or have enough support to override a veto.

“I have not broached this subject at all with the Governor-Elect and don’t know what his views are,” Deeds said.


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