SALES TAX VOTE A SIGN OF CHANGE
Gloucester turns to 1% hike as tool to raise revenue
Gloucester County supervisors took some first steps this week toward raising tax revenue, authorizing a referendum on a local sales tax to fund school construction, signaling an emerging trend in how Virginians pay for big public projects.
The supervisors also voted to delay next year’s real estate reassessment by a year, in part to give real estate prices time to recover from the shock of the pandemic.
The sales tax surcharge referendum will ask county voters whether Gloucester should go ahead with a local sales tax up to 1% — an extra penny for every dollar spent on buying taxable goods. The aim is to build new school facilities or renovate existing ones.
If the referendum passes and if the Board of Supervisors then enacts the full 1 percentage point increase, the surcharge would raise about $4.8 million a year, based on last year’s state sales collections in the county.
The idea is backed by the county’s chamber of commerce. Neighboring counties have said they like the idea — which matters because many of their residents shop in Gloucester and would pay the tax, said County Administrator Brent Fedors.
“It’s a way of bringing revenue from outside into the county,” he told supervisors.
It’s an option that opened for the county after state Sen. Thomas K. Norment Jr., RJames City, convinced the General Assembly to expand the special permission it granted Halifax County last year to levy a local sales tax.
The School Board has proposed and the supervisors have approved a $40 million renovation, although some supervisors want to build a new facility.
That hotly debated bill to help rural Halifax, where the only high school is sinking into the ground, marked a major break with Virginia’s tradition of tight General Assembly control over city and county governments. Norment’s bill for Gloucester won bipartisan support.
Halifax voters approved a 1% local sales tax by a 70% to 30% margin last November
handful of other localities, mostly in hard-pressed Southside Virginia, but also including Northampton County on the Eastern Shore, won similar permission this year to hold referendums for local sales taxes.
“I fully expect (the new law) to be amended in the future when other localities see the success and local receptiveness of this legislation,” Norment said.
Norment has pushed for similar approaches for regional efforts, backing the surcharges on sales and fuel taxes that the Hampton Roads Transportation Accountability Commission is using to fast-track widening of Interstate 64 and the expansion of the Hampton Roads Bridge Tunnel, as well as a sales tax surcharge for the Historic Triangle to boost its tourism efforts.
“Localities at some point in time have to stop waiting for state government to provide funding on critical projects and engage in selfhelp,” Norment said. “If Hampton Roads waited for state dollars to widen I-64, I would be pushing up daisies in Cedar Grove Cemetery.”
In Gloucester, the school construction challenge is its aging high school. There. have been few upgrades since it was built in 1975.
“The superintendent came and met with me about the desperate need to renovate Gloucester High School. There actually was a health related issue of mold,” Norment said.
On top of that, the school’s wiring doesn’t meet current demands from computers and other electronic equipment, and the heating and air condition system is prone to failure, School Board budget documents show. Bathrooms and fixtures also need upgrades and improvements.
The School Board has proposed and the supervisors have approved a $40 million renovation, although some supervisors want to build a new facility.
That’s the question for the Halifax School Board, after getting an estimate that a new high school will probably cost more than $100 million.
Gloucester’s supervisors were the first of the seven newly authorized localities to set a referendum, approving the idea with a 6-0 vote.
They also approved, but on a split 4-2 vote, a proposal to delay the next assessment of real estate by a year.
County Assessor Daniel Thomas said doing that would mean he and his staff would have more sales data to use to determine the fair market value of property, which in Virginia is the basis of tax assessment. The tax property owners end up paying depends on that assessment and on the rate per $100 of assessed value that county boards of supervisors or city councils set.
Meanwhile, the pandemic is roiling real estate markets.
“Confidence levels are changing daily, often dramatically,” he said. “The long term effect on real estate markets and the economy is in question.”
He said he does not expect real estate markets to settle down until the middle of next year.