Virginia first funded road construction and maintenance through the corvée system. County courts required that local residents had to work for a certain number of days each year to fill in muddy ruts, clear away brush and stumps, and ensure the roads were passable. The court appointed road overseers for different districts, and they organized road maintenance projects each year.
In an 1892 test case, William F. Proffitt in Louisa County objected to the demand that he contribute two days of free labor. When he refused, he was fined by the Cuckoo District road overseer. After Proffitt failed to pay and the county arrested him, he claimed his imprisonment violated the state constitution.
The Virginia Supreme Court of Appeals agreed with him, in a 3-2 decision. The court ruled that the labor mandate was a poll tax, and exceeded the limits on such a tax in the Virginia constitution. In all other states except Nevada, courts upheld the labor requirement. So did the US Supreme Court, saying it did not impose "involuntary servitude" any more than the requirement to serve on a jury or in the militia.1
Virginia funded annual road maintenance by mandating unpaid labor, until the state's top court ruled in 1894 that the mandate was unconstitutional
Source: Virginia Chronicle, Richmond Dispatch (p.4, February 2, 1894)
After the Virginia Supreme Court of Appeals ruled that mandating labor without compensation was not legal, the state could use convict labor, tax revenue, or both. Governor O'Ferrall, in his 1895 report to the General Assembly, called for hiring workers rather than forcing convicts to repair the roads:2
The 1902 Constitution removed the prohibition of state funding for pubic roads, though it retained limits on all other forms of internal improvements. In 1906, it authorized use on convicts on local roads. Those guilty of "minor felonies" could be sentenced to road work rather than time to be served in the state penitentiary. The state fed, clothed, transported, and guarded the prisoners while the county furnished all equipment, materials, and a civil engineer to oversee the projects.3
The legislature began providing cash directly starting in 1908. It appropriated $250,000 for use by local jurisdictions, with the requirement that the counties had to raise matching funds.4