Six years ago, the city of Danville in Virginia’s Southside region struggled to raise funds for school construction and modernization across 15 schools, with nearly a quarter of its population, around 42,000, living in poverty.
But since the state authorized the city to levy an additional sales and use tax of up to 1% for school rehabilitation and voters agreed to the measure seven years ago, the future has changed for students, staff and local leaders.
Virginia follows the Dillon Rule, which limits local governments to powers the state explicitly grants. Adopted by the Virginia Supreme Court in 1896, the rule means cities, towns and counties often must ask the General Assembly for authority to change taxes or regulations. For example, localities can set property tax rates, but cannot change the sales tax rate without state approval.
“It’s been great so far,” said Michael Adkins, Danville’s assistant city manager and chief financial officer.
“Based on the receipts we’re getting each month, we’re easily able to take care of the debt service on those 20-year bonds,” he added. “And we have a little leftover, so we were able to accumulate the excess 1% sales tax for specific projects or contingency funds for the school renovations and construction that have been going on here.”…