Most Virginia localities can now ask voters to approve bumping sales taxes up to 1% to fund school construction and renovations under the new budget.
That could come into play in Suffolk, which wants to replace five schools in its 10-year capital improvements program; but a sales tax increase won’t be on the ballot this year, according to Councilmember Shelley Butler Barlow.
“There’s no way we would be able to do that by this fall,” she said, because the city doesn’t have enough time to organize a referendum and publicize it before polls open.
Prior to the state adopting the budget on Monday, only nine localities could implement a 1% sales tax for school upgrades and replacements. Virginia is a Dillon’s Rule state, meaning localities only have powers explicitly given to them by the commonwealth. The budget gives all cities and counties except nine Northern Virginia localities including Arlington, Alexandria and Fairfax the authority to charge the new tax if voters approve it in a referendum.
Suffolk communications staff weren’t able to say what an additional 1% would draw, but noted that in fiscal year 2025, the total amount collected from the state’s 1% sales tax was nearly $19 million. By comparison, 1 cent on Suffolk’s property tax rate brings in about $1.7 million.
Butler Barlow said council will need to mull over asking voters to increase sales tax. The plan to replace five schools, each of which is more than 50 years old, is expected to surpass $377 million through 2036. School expansions and renovations push that near $500 million, and costs won't get cheaper with time.
“If you’re delaying it for three or four or five years, then the cost is going to be even that much more expensive,” Butler Barlow said.
The city's financial situation is compounded as Suffolk is also putting millions into its roadways while limiting new debt and how much it can pull from reserves to maintain its AAA bond rating, which keeps interest rates low.
The sales tax revenue sounds enticing, but Butler Barlow is uncertain if residents will want to add to the 6% rate.
“People are under a lot of pressure because of the cost of everything right now,” she said. “I’m very sensitive to the fact that folks are struggling right now with the economy that we’re in.”
A referendum in 2027 would also complicate Butler Barlow’s hopes to ask voters to support property tax funding for an agricultural reserve program.
“How much can we ask the taxpayers to sign off on?” Butler Barlow questioned. “Education is really important; agriculture is really important; but does it even make sense to ask for both of those things?”
