by James C. SherlockThe Martinsville Bulletin

, perhaps the best remaining newspaper in the state for local coverage, published a must-read article on the reversion of Martinsville from city to town and joining Henry County.

Overview

Martinsville’s current city logo, above, was perhaps prescient. Martinsville has been hemorrhaging population, losing more than 18% in the past 10 years, and was financially stressed before that loss.

Reversion in Virginia is a one-handed game. The small cities hold all of the cards.

Henry County is vocally opposed but feels helpless to stop it. The Henry County Supervisors voted to skip the legal process to avoid the costs. They called the reversion MOU “the best we could hope for and voted for it to avoid years of court battles”.

They are right  What they avoided was the special court that would have overseen the reversion under Virginia law had they not come to an agreement. The county would have been a defendant in a trial.

The rules for that court specified in that law give the small cities every advantage in a trial. That same special court would have overseen the transition for a decade. Every decision.

The changes reversion portends for city and county residents are massive. Now that his has happened, does anyone think this will be the last reversion?

Virginia law

From the applicable Virginia law:

Any city in this Commonwealth with a population at the time of the latest United States decennial census of less than 50,000 people, after fulfilling the requirements of Chapter 29 (§ 15.2-2900 et seq.), may by ordinance passed by a recorded majority vote of all the members thereof, petition the circuit court for the city, alleging that the city meets the criteria set out in § 15.2-4106 for an order granting town status to the city. The circuit court with which the petition is filed shall notify the Supreme Court, which shall appoint a special court to hear the case as prescribed by Chapter 30 (§ 15.2-3000 et seq.) of this title.

The Henry County website reflects a reaction by a county that was given no say in the matter. Bold words are bold on the website:

Henry County and its citizens cannot stop reversion. Under the Code of Virginia, a city with a population less than 50,000 may initiate reversion merely with a vote of that city’s governing body. No referendum is required of city residents or of residents from the surrounding locality, in this case, Henry County. Henry County tried numerous times to establish a referendum requirement through action by the General Assembly, but the proposed legislation never passed. Henry County may participate in the process before the Commission on Local Government, but it cannot stop reversion. At best, it can ask for terms and conditions that will lessen reversion’s impact on the County.

Given these realities, the Board of Supervisors determined that the best path forward was to negotiate with the City of Martinsville and try to soften the impact on the County and our residents. These discussions led to the Memorandum of Understanding (MOU) between the localities.

Regardless of whether the localities reached a negotiated settlement or if the process played out over many years in the court system, Henry County has no choice but to assume responsibility for the following services following reversion:

  • Educating all Martinsville school students – there will be no Martinsville school system, and all students will become part of the Henry County school system
  • Taking over duties such as Treasurer, Commissioner of the Revenue, Elections and Registrar, Jail and Corrections, Commonwealth’s Attorney, and all court systems
  • Taking on 100% of the local costs for Social Services and Health Department

Transitioning these services to the County and providing these services will be very expensive!

Martinsville will lose its school board and likely its circuit court.

Virginia counties and cities are required to elect five constitutional officers

“The voters of each county and city shall elect a treasurer, a sheriff, an attorney for the Commonwealth, a clerk, who shall be clerk of the court in the office of which deeds are recorded, and a commissioner of revenue.”

Those offices will be lost to Martinsville.

Martinsville police, fire and rescue, public works, school employees and everyone else in Martinsville government will become town employees.

Health Care 

Then there is health care – of sorts.

The largest employer in the City of Martinsville, the Martinsville campus of Sovah Health, employs over 700 people, has over 100 physicians and allied health professionals and provides over 22 medical specialties.  On Medicare Hospital Compare, it has a three star overall rating and a one-star patient rating.

The good news is that Sovah Martinsville paid $9,301,062 in taxes last year and distributed a payroll of $53,803,229 to more than 720 employees.

Under the heading of semi-prescription healthcare, a 2019 Washington Post analysis of data from the DEA’s opioid database shows that two Virginia cities—Norton (306 pills per person) and Martinsville (242 pills per person)—received the most opioid pain pills per capita in the country between 2006 and 2012.  Some of those certainly were consumed in the county, but that is no reason to celebrate.

Money

Henry County is under no long term obligation obligation to fund all of the current Martinsville employees. And the new “town” of Martinsville certainly can’t. That is why it is reverting.

Henry County is not Fairfax.  The Census Bureau puts the Henry County median household income at $37,952.  The Martinsville number is $34,371.  Statewide it is $74,922.

Education and Race

There is active discussion of closing Martinsville High School. There are too few students for that very large school and room for the students in Henry County’s two high schools. No word on what happens to Martinsville High teachers. Martinsville residents are of course upset at this potential closing.

Racial politics are just below the surface on both sides.

Martinsville High School student body is 62% Black. Henry County’s two High Schools are 15% and 29% Black respectively. Because there are over 1,000 students each in the two Henry County high schools and about 500 in Martinsville High, each is likely to remain majority white if Martinsville HS is closed.

“The MOU, produced as a result of two days of mediation, includes a requirement that Martinsville and Henry County jointly apply to The Harvest Foundation to fund a comprehensive study of the consolidated school system to determine what arrangement will be most efficient and least expensive while being sensitive to “racial and economic equity.”

Then comes the most pregnant sentence in the article.

“The Virginia Department of Education and Board of Education will be invited to participate in that study.”

So, the study will be hyper-politicized with the dogma-driven participation of the uber-woke Board and Department of Education in rural school board matters as long as we have Democratic Governors appointing the Board.

That should go well.

Future reversion candidates

But the reversion dam is broken.

I looked at the data presented by the Virginia Department of Housing and Community Development in 2017 (2014 data) on the ten Virginia cities experiencing the greatest financial stress to see where the next reversions may be put into play.

The are ranked from the most stressed.   I added the 2020 population, the growth in population from 2010 to 2020 and the median household income 2019.  Virginia median household income in 2019 was $74,222.

  1. Emporia 5,346               -5.6%.    $27,063
  2. Buena Vista 6,478        +1.9%.    $32,455
  3. Petersburg* 31,346        -6.6%.   $38,679
  4. Martinsville 12,554     -18.2%      $34,371
  5. Covington 5,538.         -12%.        $40,655
  6. Galax 6,347                  – 7.3%.      $33,575
  7. Lynchburg* 82,168   + 25.8%.    $46,409
  8. Franklin 7,967             – 3.7%.      $40,417
  9. Hopewell 22,529.       +1.0%.       $39,030
  10. Radford  18,249        +15%.          $36,297

Only cities with less than 50,000 residents are eligible for reversion under Virginia law. That eliminates Lynchburg.  Two of those cities, Petersburg and Lynchburg, host hospitals that are tax exempt.

Using those data and choosing only cities that are also losing population, we can perhaps surmise that Emporia, Petersburg, Covington, Galax, and Franklin are the most likely candidates along with highly financial-stressed Buena Vista.

Looking ahead

Now that Martinsville has led the way, the politics of reversion likely will roil those cities and surrounding counties very quickly. And Martinsville will need a new logo.

The state government will be there to “help.”

God save them all.

(Updated 2:40 PM May 28)


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Comments

25 responses to “The One-Sided Decision in the Reversion of Martinsville – the Start of a Trend?”

  1. Publius Avatar
    Publius

    Richmond is a city over 50,000. Is there a provision for such a city reverting?
    I have long thought that would bring sanity and potential improvement as opposed to Henrico and Chesterfield arbitraging against Richmond…

      1. Publius Avatar
        Publius

        Tom – is there a UVA Parents Facebook Group?
        I’m not on Facebook, but I know there are many people POed about the vaccine mandate.
        Walter Smith
        VP, Counsel
        The YouDecide Building
        4470 Cox Road, Suite 140
        Glen Allen, Virginia 23060
        (804) 840-1137
        walter.smith@youdecide.com

  2. South Boston, another southside municipality, reverted to township status in Halifax County in 1995. I wonder how that worked out.

    The consolidation of Martinsville and Henry County will eliminate the expenses of a city council, a school board, and five constitutional offices. There will be some savings. I would be interested to see a fiscal impact analysis.

    1. JAMES Avatar

      South Boston has continued to lose population over the past decade. It is 57% female and 57% Black. Median household income at $42,311 in 2019 about half of the state average. Halifax County as a whole is better off economically than the town. MHI of $51,184 in same year. Halifax County as a whole 60% white.

      I suspect that Sentara Halifax Regional Hospital is the biggest private employer.

  3. James Wyatt Whitehead Avatar
    James Wyatt Whitehead

    Our leaders in Richmond and Washington have had decades to do their part to revitalize the economies of forgotten places in Virginia such as Martinsville. Throwing the city and county into a blender and flipping the switch will not produce puree. More likely lumpy mashed potatoes.

  4. Ted McCormack Avatar
    Ted McCormack

    How quickly you forget. Many here have commented about the evil of independent cities. The General Assembly agreed and in 1990 set up a process whereby any city under 50,000 could revert to town status. The result would be that a lot of duplicate services – schools, social and health services, constitutional officers, etc. – would become the responsibility of the receiving county. In turn, the residents of the new town would become subject to taxation by the county, i.e., real estate and personal property, machinery tools, BPOL, etc. so the town residents would be treated like municipal residents in the other 50 states, subject to double taxation. The reverted town would remain responsible for all debt contracted by the former city. A special incentive to the county would be that it would get to collect the bulk of the sale tax in the town. Towns are treated different than cities with respect to sales tax because they do not operated their own school system. In theory, the reversion would be a financial “wash” but I have not see any long term studies to say one way or the other. Also, there are certain financial incentives in state law to encourage reversions and/or consolidations.

    In addition, the town could never return to independent city status [the law also forbade the creation of any new independent cities], but the town could initiate an annexation against the county, something independent cities have been barred from doing since 1997. In almost all of the reversions resulting from a negotiated settlement, like that proposed in the Martinsville-Henry County situation, have contained a temporary bar on annexations by the new town.

    The reason why the county cannot say “HELL NO” in reversions is that the General Assembly, and the legislative study that proposed the process, wanted to encourage cities, especially the small and or struggling ones, to give up their independent status. The county can, however, make the process very expensive for the city, and the county, taxpayers, by hiring law firms that specialize in city-county battles and draw the process out through the review of the city’s petition by the Virginia Commission on Local Government and then the special three-judge court. After the first court-ordered reversion of South Boston, the parties agreed that a negotiated settlement was a win-win situation. Two of the subsequent reversions – Clifton Forge and Bedford – were settlements.

    Martinsville is unique in that it will be the first reversion involving two truly separate school divisions. All three of the preceding reversions involved consolidated or partially consolidated city-county school divisions. Henry County has been trying without success since the early 2000s to get special legislation [DHS can explain that to you] to require Martinsville’s reversion subject to approval by the residents of both the city and the county. Since Martinsville had previously tried at least once to bring about a consolidation of the city and county, the city leaders thought that reversion was the best process.

    According to the news reports, Henry County says it will lose money in the reversion. I would have to see their study and ALL of the assumptions behind every number. As you all know, one set of “experts” can “prove” white is black while another set can “prove” black is white. Perhaps the school consolidation issue is the reason for the possible money loss to the county.

    For those who want to dive more deeply into the subject, there is a very dated report done by the Virginia Municipal League at https://vml.org/wp-content/uploads/2017/06/Reversions96_1_0.pdf. You can also read the advisory reports on all the revisions so far at https://www.dhcd.virginia.gov/reversion-city-town-status. You can also read the report of the legislative study commission that came up with the reversion idea and why here https://rga.lis.virginia.gov/Published/1990/HD69/PDF

    Happy reading!
    Bosun

  5. Farmville, Virginia, is similar in size, economic base and demographics to other Southside communities. But its downtown area is more vibrant than most others. What makes the difference? Green Front, the furniture retailer. The entrepreneurial founders of Green Front found a winning formula in retrofitting old warehouses and filling them with furniture. People drive an hour or more or more to shop there. Farmville is a Saturday destination for furniture buyers in the Richmond area.

    I’m guessing the company has redeveloped at least a half dozen buildings, providing a stimulus for others to invest in the downtown area. Successful private business does more to revive an area than all the government programs in the world. Keep the cost of government low (which may be consolidating cities and counties). Keep taxes low. Foster entrepreneurial business formation.

    1. Ted McCormack Avatar
      Ted McCormack

      About 10 years ago, about 90% of the sale tax revenue received by Prince George County came from businesses within Farmville. Green Front and Longwood helped. Back when it was allowed, the town did a study about becoming an independent city, but the cost of creating a separate school division was too great.

      1. JuniusQuercus Avatar
        JuniusQuercus

        Prince Edward, not Prince George.

        1. Ted McCormack Avatar
          Ted McCormack

          Thank you for correcting my geographic error.

    2. JAMES Avatar

      Unless your major business, as in Lynchburg and Petersburg, is a 501c3 hospital system that pays no taxes, federal, state or local. Martinsville’s hospital system pays taxes – over $9.3 million last year.

    3. JAMES Avatar

      Good thing, because Centra Southside’s three facilities in Farmville pay no taxes.

      And Farmville’s median household income in 2019 was only $35,995.

      Hampton-Sydney and Longwood probably are a net plus, but I don’t know the numbers.

      They are not on the top ten financially stressed list only because their city government lives within its means.

      1. Ted McCormack Avatar
        Ted McCormack

        TOWN!

  6. Fred Flintstone Avatar
    Fred Flintstone

    Would you prefer to end the moratorium on annexation that largely created this problem? I thought not.

  7. Paul Sweet Avatar
    Paul Sweet

    Bedford reverted from city to town a few years ago. They unified their water & sewer systems as well as the schools. I think that Bedford was stagnating, but still in better shape than many of the cities listed.

    I think that most of the city/county mergers in Tidewater were done to prevent Norfolk from gobbling the counties up.

    A big reason many cities are hurting is that a lot of businesses are moving into the counties. This is probably more for cheaper land and to follow population growth then to avoid city taxes, although NIMBY may also play a role. I remember back in the 1980s a developer wanted to build a mall in Charlottesville. The zoning and planning restrictions and challenges got so bad they just went a few miles north to some vacant land in the county to build it. Charlottesville turned around and tried to annex that part of the county, but that was around the time the state stopped allowing cities to annex county land.

    1. Publius Avatar
      Publius

      Also BPOL taxes…better public schools…lower RE tax rates on lower valuations

    2. Ted McCormack Avatar
      Ted McCormack

      Bedford schools were already partially consolidated. You are correct that the Tidewater mergers were defenses against Norfolk, Portsmouth, Hampton and Newport News from annexing. There is a book written about it.

  8. Acbar Avatar

    Accepting that the reversion statute applies by its terms only to cities under 50,000 in population — what about merger, as in the Hampton Roads consolidations of the 70s: Chesapeake, Hampton and Virginia Beach? Isn’t that option still available to Richmond or Lynchburg?

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      Yes, if the counties agree.

  9. […] are several  clarifications, as well as context, needed in response to his post on this subject, which would be too long for a comment.  Therefore, I have decided to use a […]

  10. […] recent posts and comments concerning the reversion of the city of Martinsville to town status (see here, here, and here) provide a good opportunity to discuss the complexity of local government finance […]

  11. […] latest posts and feedback in regards to the reversion of town of Martinsville to city standing (see here, here, and here) present a very good alternative to debate the complexity of native authorities […]

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