Schools move forward with construction projects now that voters have approved sales tax increase

By Hadley Harbison

Heading into Tuesday’s election, school officials in Lexington and Buena Vista had been anxiously awaiting the results of a referendum that would raise the existing sales tax and generate more than $16 million for school construction projects in the region. 

Now that the tax increase has been approved in both cities, the districts have a clearer picture of available funding as they move forward with their plans. The tax is expected to generate around $6.6 million for Lexington schools and more than $9.5 million for Buena Vista schools.  

If the tax hadn’t been approved by voters, the majority of funding most likely would have had to come from significant property tax increases, according to Erin Gregg, the business manager for Lexington City Schools.  

In Buena Vista, the sales tax revenue is not expected to cover the full cost of renovations to Parry McCluer High School, according the city’s funding analysis. The revenue will help repay debt for the project, with the city potentially relying on additional tax revenue to cover the remaining cost. 

A financial adviser hired by the city of Buena Vista has suggested increasing the city’s meals tax and improving collection rates for real estate and personal property taxes to help pay the rest of the cost of the project.  

Lexington city schools also plan to continue exploring other options to fund projects.  

“The revenue expected from this sales tax is anticipated to be less than we will need for these overall, and we will continue to explore funding options to fully pay for these expenses,” Gregg said in an email. “The revenue from this additional sales tax will definitely take some of the pressure off and we are grateful to the City of Lexington residents for their support of our schools.”

Before the cities can begin collecting the tax, election results must be certified. The Virginia State Board of Elections is scheduled to certify results on Dec. 7.  

Then, the city council will need to adopt an ordinance to implement the sales tax, a copy of which will then be sent to the Virginia Tax Commissioner, according to Heather Ault, Buena Vista’s school superintendent.  

The district hopes to begin receiving the funding sometime in the spring, according to Buena Vista’s school funding analysis.  

Lexington school officials said the tax will go into effect in July. The district’s finance office will then work with the city to make sure they are prepared to start collecting the tax, Gregg said.  

This includes making sure that businesses have their point-of-sale system set up and can charge the tax appropriately on eligible items like hotel rooms, restaurant meals, and many retail items. Groceries, gasoline, and prescription drugs will not be taxed.  

In Lexington, school officials plan to fund their projects as the money – expected to be around $1.3 million a year – comes in from the state.  

Their most pressing projects include a new gym floor, an HVAC system and roof repairs at Lylburn Downing Middle School. The tax is also expected to help support building renovations and a new recreation center at Rockbridge County High School; since Lexington does not have a high school, the city shares fiscal responsibility for RCHS projects. 

The projects at the high school are expected to cost around $5.8 million and the cost of projects at the middle school is expected to cost around $1.7 million.  

The sales tax increase will stave off property tax increases and share the burden of the construction costs with those who visit the area, not putting it solely on residents, Lexington schools superintendent Rebecca Walters said. 

“We are very proud of our schools and the buildings that we have. But they get old, and HVAC systems stop working,” Walters said. “Those are things that we don’t really have a choice but to repair when they have reached the end of their shelf life.” 

In Buena Vista, Ault said the district hasn’t worked out all the details of how it will use the revenue. 

The district’s school funding analysis shows that the district plans to fund the $17.3 million addition to Parry McCluer High School, which recently consolidated with the middle school.  

The tax in Buena Vista will remain in place until 2046.  

“This dedicated funding provides a critical path forward for addressing our school facilities needs and creating learning environments that support our students for generations to come,” Ault said.