Why won’t the state approve a 1% tax for Prince Edward County?

Published 3:56 am Sunday, October 1, 2023

FARMVILLE – The question seems like an easy one. After all, eight other counties and a city in Virginia have asked the same question and been told yes. In Virginia, a city or county has to get permission from the General Assembly to increase sales tax. First the Assembly has to pass a bill, then local residents have to vote on it in the next election. That seems simple enough. Charlotte County, Gloucester County, Halifax County, Henry County, Mecklenburg County, Northampton County, Patrick County, Pittsylvania County and the City of Danville have all asked permission to raise the local sales tax by 1% and been told yes. But when it comes to Prince Edward County, for some reason, the answer is no. 

And it’s not a single no, either. Previous county administrator Wade Bartlett floated the idea in 2019. Last year, supervisors also expressed interest in moving forward, with a bill getting filed in the General Assembly to make it happen. In the session that ended earlier this year, yet another bill was filed and yet again, Prince Edward was told no, with that bill dying before a full vote was taken on the House floor. 

Del. James Edmunds filed HB 1605 on Jan. 6 of this year, a bill that specifically only pertains to Prince Edward County getting permission to ask voters about a 1% sales tax hike. That same day, it went to the House Committee on Finance and on Jan. 19, it was assigned to a subcommittee. That’s where it died, not getting a vote before the Feb. 7 deadline. 

What would we use it for? 

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Before we get to the issue at hand, what exactly would this 1% tax be used on? The answer is to help pay for renovations at Prince Edward Elementary. Last year, the county staff estimated that a 1% sales tax would generate between $3 million to $3.5 million annually. 

Prince Edward County supervisors already know the price tag for the renovations, which stands at $43.5 million. And they, along with county staff, want to try everything possible to cover that cost without having to raise property taxes. That 1% sales tax would cover the county’s yearly debt service on that bill, just like you pay down a big purchase on a credit card. To generate that same kind of revenue with property tax, it would take as much as 17 cents of real estate tax rate. It’s much easier to absorb that through sales tax. 

“There are folks that come into the community, and they’ll go shop at Green Front, or travel through and stop at one of our restaurants,” Prince Edward County Administrator Doug Stanley said. “They’re paying for part of (the school renovations), and not just the people who own property in Prince Edward.”

While Stanley talked about the sales tax only within the context of school capital improvement projects, securing other financing for that work means funding would not come from county coffers. With that the case, it could make paying for or even financing other major projects —like the Sandy River Reservoir expansion — more tenable.

What’s the problem for Prince Edward County? 

The issue, according to our local delegation, is partly simple bad timing. Prince Edward has requested this during the same sessions when Assembly members have pushed similar bills that are focused statewide. It’s easy to get a singular request through. That’s how each of the aforementioned counties and city got it done. But each of the last two years, Assembly members have pushed for one big bill, giving all counties a universal approval to put this before their voters. 

“I supported it last year,” State Sen. Frank Ruff said of Prince Edward’s request, “but where it got caught up was when a senator from the Richmond area proposed to make the (1 percent tax) statewide.”

That particular bill — S.B. 1408 — was introduced by state Sen. Jeremy McPike and then-Sen. Jennifer McClellan. It would have allowed any county to impose a 1% sales tax, but only if it were approved by voters there, and the money was specifically earmarked for school capital improvement projects.

And that, not surprisingly, runs into political landmines, as not every county wants or needs it. In turn, their respective delegates and senators vote against the larger measure. S.B. 1408, for example, died in committee, just like a similar bill filed the year before. 

Ruff says he supports letting Prince Edward voters decide if they want the 1% sales tax to happen. However he, and others, are not for automatically extending those benefits to every county at the state level. Basically, he questions why give counties the authority to raise taxes when they haven’t even asked or shown a need. 

He also questions how much of an impact the sales tax would have in some areas. Neighboring Charlotte County, for example, or Mecklenburg County, don’t offer enough retail for a sales tax to work properly, even though they could use the extra revenue. 

Ruff doesn’t see the tax as potentially driving any consumers away, as he doesn’t feel it’s big enough to do that. 

“A decade ago, I guess, North Carolina decided to let each locality add a cent or two to the sales tax,” Ruff said. “I’m five miles from the Carolina line. I still saw plenty of Virginia plates at stores over there, so all of that doesn’t affect people quite like the philosophy of it might.”


What happens next?

Well, it’s back to the drawing board. Richmond lawmakers aren’t back in session again until after the new year, where Prince Edward officials will try, for a third time, to get approval of the 1% sales tax. 

And even then, if it does get approval there, Prince Edward County would have to put the issues in front of voters. But a referendum like that couldn’t run until at least the November 2024 election, meaning it would be 2025 before any impact.