GOVERNOR'S VETO

Pursuant to Article V, Section 6 of the Constitution of Virginia, I veto Senate Bill 14, which authorizes counties and cities to implement an increased sale and use tax rate for school construction.

School construction is a worthy cause, and Virginia has made significant progress. In 2022, the Budget supported more than three billion dollars in school construction projects through targeted assistance, formula-based school construction and modernization grants, and low-interest loans. This was achieved all while providing more than five billion dollars in tax relief.

This proposal could result in a nearly $1.5 billion a year tax increase on Virginians.  Some localities would have a combined sales tax rate of eight percent, with no additional offsets, such as reduced income tax or property tax.

In addition, the revenues from this tax increase are entirely fungible. While the tax is dedicated to school capital costs, such as information technology, the new source of revenues would indirectly release funding for other purposes, supplanting other revenues without necessarily increasing education spending.

The proposed Common Ground budget supports a $1.2 billion increase K-12 appropriations over the biennium and makes available substantial construction loan and grant funding for school construction.

The Commonwealth should pursue a tax policy that unleashes economic development and prioritizes job and wage growth through innovative reforms. These reforms must allow hardworking Virginians to keep more of their money, not less; any proposal that increases the cost of living and the cost of business is not a policy we should pursue.

Accordingly, I veto this bill.