Six years ago, the city of Danville in Virginia’s Southside region struggled to raise funds for school construction and modernization across 15 schools, with nearly a quarter of its population, around 42,000, living in poverty.

But since the state authorized the city to levy an additional sales and use tax of up to 1% for school rehabilitation and voters agreed to the measure seven years ago, the future has changed for students, staff and local leaders.

“It’s been great so far,” said Michael Adkins, Danville’s assistant city manager and chief financial officer. 

“Based on the receipts we’re getting each month, we’re easily able to take care of the debt service on those 20-year bonds,” he added. “And we have a little leftover, so we were able to accumulate the excess 1% sales tax for specific projects or contingency funds for the school renovations and construction that have been going on here.”

Across the commonwealth, 47 localities hope for similar success, if not better, when voters decide next month whether to adopt the 1% tax and allow those revenues to support school construction and modernization costs. 

Records obtained by The Mercury show mixed results in the nine localities including Danville that Virginia’s legislature authorized to impose the 1% tax beginning in 2019. Those areas have generated $119 million total, state tax records show.

Despite the monetary benefits for schools, support for the tool isn’t unanimous statewide. 

Concern around increased taxes

In York County, where voters will consider approving the tax, some residents are urging voters to reject the measure, arguing that it’s unnecessary because some localities, including York and Chesterfield County, already pay a significant amount in sales and use taxes.

According to the Department of Taxation, York County pays 7%, along with Williamsburg and James City County, representing the highest rate in the commonwealth. The next highest rate is 6.3%, for localities such as the city of Danville, and the counties of Charlotte, Gloucester, Halifax, Henry, Northampton, Patrick and Pittsylvania.

Steve Kennedy, a volunteer with the VOTE NO referendum committee, said voters in York and elsewhere should “100%” oppose the measure.

“Beyond the overall tax burden, the sales tax is highly regressive and hits low-income households the hardest,” Kennedy said, arguing that those same people are already struggling in a “stagflationary economy created by politicians’ spending and Federal Reserve policy.”

Kennedy added that before York County asks taxpayers to approve a new 1% sales tax and potentially take on decades of debt, it should prove that the money is truly necessary, that existing revenues have been used responsibly and that the projected sales-tax revenue is realistic.

Mecklenburg, one of the nine localities with state-approved authority, has not put the matter to voters after receiving authorization, largely because they were not in favor of raising taxes, according to the Board of Supervisors’ records in 2021.

In August 2021, the county considered researching state and federal money that could help pay for new school construction. At that time, Mecklenburg estimated it would need about $6 million per year in debt payments to move forward with new school construction.

However, interest died down because the board did not want to raise taxes to pay for the projects, plus the county had already invested in newer additions to the three elementary schools. 

Officials were concerned that replacing the schools would mean losing that investment. The committee recommended waiting a year before asking voters to approve it.

No action has been taken in the ensuing five years since former state Sen. Frank Ruff successfully proposed the change in 2020

“We did not and will not need to impose the additional 1% sales tax authority bestowed upon us and our neighboring localities thanks to the generosity of Senator

Ruff,” Alex Gottschalk, administrator for Mecklenburg County, said in a statement to the Mercury.  “Therefore, we generate zero dollars of revenue and have made zero dollars of expenditures related to this tax and revenue streams derived from such tax authority.”

Danville’s success

In the shortest time span among the authorized localities, the city of Danville has collected more revenue than the others, with $30,739,149 in tax revenue for school construction costs through fiscal year 2025, after starting the tax in fiscal year 2023.

One takeaway from the city’s success is that it already established a significant sales-tax base of about $11 million per year, according to Adkins. In addition, the city has also attracted tourists, nonresidents and regional shoppers. 

The city has also seen increased economic activity associated with the casino, although gaming taxes are separate from the sales tax. That’s helped attract tourists, nonresidents and regional shoppers. 

“If you’re not a retail hub, it’s just going to take time,” Adkins said. “That 1% will add up. … It helps to offset your debt service if you decide to issue bonds to do some school construction … (but) certainly they’ll make a difference.”

The city invested $88 million to overhaul the 370,000-square-foot George Washington High School, which features a new gym, cafeteria, a renovated auditorium, expanded career and technical education classrooms, and remote central security systems.

Funds also went to renovating John M. Langston Campus into a modern learning facility that houses Galileo Magnet High School, RISE STEM Academy, and the administrative central offices.

The county also constructed a state-of-the-art elementary school, Arnett Hills, replacing the adjacent, aging G.L.H. Johnson Elementary School.

‘Significant impact’ in Gloucester

Gloucester County has used the 1% tax tool to generate $22,183,901 in revenue through fiscal year 2025, beginning in fiscal year 2022.

Like Danville, Gloucester is considered a retail hub in the Middle Peninsula region, and its sales tax benefits from residents’ and surrounding communities’ shopping there.

Gloucester has dedicated its revenues to projects focused on modernizing and improving school facilities, safety, accessibility and infrastructure, including the renovation of Gloucester High School.

George Bains, interim administrator for Gloucester County, said the investment has already made a noticeable mark on the school system.

“The 1% school sales tax has already made a significant impact here in Gloucester by supporting major renovations to our high school,” Bains said. “Not only did the renovations address basic functions of the building — they allow our students to take pride in our flagship school.”

Bains said other renovation projects supported by the sales tax revenue are in the works and will “ensure all Gloucester County students have classrooms and facilities that are modern, secure, and provide optimal learning environments.”

The county has also used the funds to replace an aging HVAC and air quality systems, repave high-traffic areas and lots, replace outdated and unsafe playgrounds, upgrade athletic fields and redesign school traffic loops.

A ‘very fortunate’ Halifax

Halifax County, the first to receive state authorization, has collected $20,857,413 in tax revenue since implementing the tax in fiscal year 2021.

Former Republican Del. James Edmunds II pushed for the authorization as the county faced “very little opportunities to generate tax revenue,” he said to a House finance subcommittee in 2019. 

After the county raised the property tax rate to remodel the elementary schools and middle school, Edmunds said constructing a new high school would have been too much for the county’s tax rate to cover.

Ultimately, lawmakers endorsed the measure.

“Halifax is very fortunate to have been the first to initiate the 1% sales tax and our goal is to use it in the most fiscally responsible way possible to maximize the impact for all of our schools,” Halifax Schools Superintendent Amy Huskin said 

Halifax opened its new high school last year and is developing a new athletic complex. The county’s 1% sales tax, along with county funds, is being used to repay a portion of the high school’s debt service. The county has not yet drawn from the sales-tax account, but it is expected to begin doing so soon.

The school board also has other projects lined up in its Capital Improvement Plan. A full assessment of school assets is underway to determine priority needs and the best use of available funding. 

Other successes, what’s next

In Charlotte, Henry, Northampton, Patrick and Pittsylvania counties, the 1% sales tax tool has also proved successful. 

Henry County, one of the first areas to get approval, raised $22,212,783 in tax money for school construction through fiscal year 2025. Collections began in fiscal year 2021. Since then, Henry County has paid for improvements to sports facilities, heating and cooling systems, roofs, accessibility, and electrical systems throughout the district generating about $5.5 million annually in local capital revenue.

Between fiscal years 2022 and 2025, Northampton County collected $7,888,115 in tax money for school construction. The county set aside $91 million to expand and update its middle and high schools, to be finished next year, and $20 million to replace heating and cooling systems at its two elementary schools.

Patrick County collected $5,926,293 in tax money for school construction through fiscal year 2025. Collections started in fiscal year 2022. The biggest project was a $1.2 million update to its high school.

Through fiscal year 2025, Pittsylvania County raised $6,753,163, which varies slightly from the state’s record by about $5,000 in tax money for new school capital infrastructure. Collections began in fiscal year 2024. The biggest project was improving security and safety systems at 15 elementary and middle schools across the area, costing around $6 million.

In Charlotte County, from fiscal year 2022 through fiscal year 2025, the county collected $3,125,311 in tax money to pay for school construction.

Most of it went to new building work, including early planning and design for Randolph Henry High School, worth nearly $1 million.

According to a 2022 report to the state, a review of the high school found accessibility issues, uneven and cracked sidewalks and other items requiring remediation. Records show the school has been open since 1939, with improvements and a significant addition in 1968 — nearly 60 years ago. 

The remaining funds were used to fix the shared bathroom at Phenix Elementary School, install tile floors in the high school’s cafeteria and hallway, and remove asbestos around the school.

Early voting runs through Oct. 31 and Election Day is Nov. 3, when residents in all Virginia localities will decide whether to adopt the 1% sales tax for school construction and modernization needs.