Martinsville City Council voted on July 14 to allow voters to decide whether to approve a 1 percent local sales tax dedicated to school capital projects.
The action does not enact the tax. Instead, the resolution allows citizens to vote on whether to approve the additional sales tax, which would be used only for capital improvements at schools.
City Manager Rob Fincher said the resolution had to be approved by July 28 in order for the referendum process to move forward.
“It had to be done by July 28. So that’s why this resolution is there again. It’s not to support or to oppose. It is just simply this allows the citizens to vote on this 1 percent sales tax that mimics what the county does, Pittsylvania County, Danville, all those, if you will,” Fincher said.
If approved by voters, the additional sales tax would provide funding specifically for school capital projects.
“It would allow for a 1 percent increase in local sales tax. That money would be earmarked for school capital projects. In other jurisdictions that have done that, that becomes their main source for projects, in which the money that that locality is using for capital funding can then be utilized for other projects for that municipality. So it’s a way of funding school capital projects, and it can only be used for capital projects,” Fincher said.
“It can’t be used for salaries or anything of that nature. Then it frees up funds for the locality,” he said.
Vice Mayor Kathy Lawson asked whether the tax would be directly applied to Martinsville residents.
“No, it’s a consumer tax, and we like to refer to it as a penny tax because basically it’s one penny on items that are a dollar. It has been quite effective in other jurisdictions, but there again, this enables the citizens to have a voice here,” Fincher said.
Mayor L.C. Jones noted that Henry County, Patrick County, the City of Danville and Pittsylvania County already have similar taxes.
Council member Aaron Rawls said the tax would also affect consumers who shop in Martinsville but do not live in the city.
“When we say it isn’t a direct tax on the public, obviously it is on the citizens of Martinsville. But I think there’s, I forget the numbers now, 45 percent of traffic is incoming to Martinsville every day. So it’s a way of distributing whatever burden we have to people who don’t always live here. We were the only locality that did not actually adopt this when it came out years ago, which I think was unfortunate,” Rawls said.
Lawson said Martinsville residents already pay similar taxes when shopping in neighboring localities.
“If you’re buying in Henry County now, if you shop at Walmart, Lowe’s, Ollie’s, Roses, or Rural King, if you go to any of those stores, you’re currently paying for Henry County,” Lawson said.
Council also approved appropriating funds for a 3.5 percent cost-of-living adjustment for city employees.
“It is a cost-of-living adjustment, just like what occurred with Social Security and some other programs. The state also ordered 4 percent for teachers each year for the next two years, so the school boards across the state will also have to make adjustments,” Fincher said.
Fincher said the city has an agreement to match state actions related to employee compensation.
“We have an agreement that we match what the state does so that way there is no discrepancy among the employees. So after consultation with the county and discussing exactly what they were doing, we kind of did something similar. This is an appropriation to move the funds so that way we can pay the three-and-a-half percent, matching the state. Half of those funds will be returned to us through the constitutional offices from the Compensation Board,” Fincher said.
The funds will be placed in a separate line item rather than individual salary accounts, Fincher said.
“So this pays for the increase for the city employees. These funds will be put in a special line item, not into the salary line items. That way it’s controlled, and it may not be utilized if we have a high degree of turnover or if the salaries don’t reach that amount. That way it makes it easier to put back into the general fund,” he said.
In other business, council also:
* Approved a request to apply for a grant of up to $50,000 through the Virginia Department of Forestry for kudzu removal.
* Discussed and considered approval of a letter of support resolution for the Virginia Department of Transportation’s Commonwealth Boulevard, Liberty Street and Market Street SMART Scale Project.
* Held a public hearing and approved on first reading Ordinance No. 2026-13 appropriating funds for water and wastewater design.
* Held a public hearing and approved on first reading Ordinance No. 2026-16, rezoning 59 parcels generally located along Liberty Street and York Street.
* During public comment, local business owner Lynn Muhammad said Martinsville needs additional ways to invest local resources.
“Right now, millions of hard-earned dollars belonging to our citizens are sitting trapped in low-interest bank accounts earning a decimal 0.38%, while our people work tirelessly. Their savings are stagnating, losing purchasing power every day to inflation. When capital sits idle, our economy sits idle. We lack capital in South Virginia. We lack a home-grown financial distribution system to mobilize it and make it grow,” Muhammad said.
Muhammad asked for the council’s support in launching an entrepreneur recruitment effort.
“We would like to launch a massive entrepreneur recruiting campaign over the next 12 months. We would like to recruit 2,000 people,” he said.
* Council candidate Michael Greene also spoke about the city’s $46 million municipal building renovation project.
* Council received updates from the Martinsville Fire Department and Piedmont Community Services.
* The council also presented a proclamation recognizing July as National Parks and Recreation Month to the Martinsville Parks and Recreation Department.
