It’s uncertain when Danville City Council’s request for a referendum on a local sales tax increase to pay for school improvements will be voted on during the 2020 General Assembly session.
“I’m not quite sure yet,” Del. Danny Marshall, R-Danville, said, adding that committees have not yet been appointed.
Marshall filed the bill, House Bill 486, on Jan. 3 that seeks permission for referendums to be held in Danville, Pittsylvania County and Henry County asking voters to approve a 1% increase in the local sales tax to fund capital improvements at schools, including renovations or new construction.
Including more than one locality in the bill helps lower the bar for passage, Marshall said. If Danville were the only locality in the legislation, the bill would need a 2/3 majority vote to pass, he said. Marshall’s bill only needs a simple majority to be approved.
If the bill passes the General Assembly, city voters would decide whether to pay a higher sales tax to fund improvements in the Danville Public School system.
Danville City Council voted Tuesday night to pass a resolution requesting permission from the General Assembly for a referendum.
The current sales tax in Danville is 5.3%, which is the state’s rate. Danville gets 1 percentage point of that 5.3%.
That percentage point generates about $8.8 million in sales tax revenue, said Danville Finance Director Michael Adkins. Another percentage point would double that amount.
A second option would have been to raise the real estate tax rate, but that would not have been feasible. The rate — currently at 84 cents per $100 of assessed value — would have had to increase by close to 40 cents to generate $8.8 million, Adkins said.
“A real estate tax increase of that magnitude would be very difficult to achieve,” said City Manager Ken Larking.
Each penny of the real estate tax generates about $225,000 to $235,000 in revenue.
In November, Larking provided a rough estimate of $9 million (hence the $8.8 million) needed per year to make payments toward about $150 million in capital that could be provided for the project — another rough estimate.
Halifax County residents voted “yes” Nov. 5 on a referendum to increase its sales tax by 1% to raise about $3.3 million per year — about $100 million over 30 years — for improvements at Halifax County High School.
The Pittsylvania County Board of Supervisors passed a resolution similar to Danville’s in December.
Pittsylvania needs $45 million over the next five years for improvements to its schools, said County Administrator David Smitherman. A 1% increase in the sales tax for the county would generate about $2.6 million annually. That money would be applied to debt payments.
A 6-cent hike in the real estate tax rate would have been needed to raise that amount, he said.
“We just raised taxes significantly two years ago,” Smitherman said. “We don’t feel like real estate owners can absorb another significant tax increase.”
As for Danville, costs for needed improvements at four schools in the city are climbing.
A little more than years ago, a study by RRMM Architects in Roanoke found renovations at George Washington High School, Langston Campus, G.L.H. Johnson Elementary School and Woodberry Hills Elementary School would cost about $119 million in all.
But thanks to price increases, it could cost about $138 million — nearly $20 million more — if improvements were made in 2021, according to a more recent study by the same firm.
In 2023, the entire project could cost up to $152 million.
The schools, all built in the 1950s, have not been renovated since the early 2000s — nearly 20 years ago for most of them.
“My fear is we’re going to have huge costs hit us from these four schools because of the work that has not been done in so many years,” said Danville Mayor Alonzo Jones. “You have to remember, this is only four schools. There are other schools that need work and have not been identified as of yet.”
Crane reports for the Register & Bee. He can be reached at (434) 791-7987.