Texas private school vouchers stall as other states enact laws

After crisscrossing Texas this year to drum up support for school choice, Gov. Greg Abbott is not deterred even though the Republican-controlled legislature failed to deliver a bill before the regular session ended last week.

“I will never relent, I will never give up,” the Republican told the conservative Texas Public Policy Foundation Friday. “We will have a special session coming up after… we get property tax reform fixed, where we will dive into and work on and pass school choice in the state of Texas.” 

Abbott wants to join governors in Florida, Iowa, Indiana, and other states this year who signed into law new or expanded K-12 voucher programs that allocate tax dollars for students attending private schools or who are educated at home.

To garner more support and offset objections that public school finances would be harmed, bills many times are tied to a funding boost for districts and teachers.

The actual price tag for school choice can be elusive. Arizona, which enacted the nation’s most-expansive voucher program in 2022, is seeing escalating costs that blew through projections.

After Katie Hobbs, a Democrat, took office as governor in January, she called for repealing the universal program put into place by the Republican-controlled legislature and then-Gov. Doug Ducey, with her office contending it would cost the state $1.5 billion over 10 years. 

Enrollment in the Empowerment Scholarship Account Program, which currently serves 57,886 students who typically receive about $7,000 annually for education expenses, is projected to increase to 100,000 students by the end of fiscal 2024 at a cost of roughly $900 million, according to a May 30 memo from the program’s executive director, Christine Accurso. 

That is 139% more than “a best guess” of $376 million for 52,500 students offered in January by Arizona’s Joint Legislative Budget Committee, which has issued what it called “highly speculative” estimates in the past as it struggled to pin down the program’s financial impact.

“Based on the new estimates provided by the Arizona Department of Education, it is quite clear Arizona cannot shoulder the $900 million burden that Republicans have placed on our taxpayers,” Democratic State Sen. Christine Marsh said in a statement.

Amid strong opposition from the legislature’s Republican majority, Hobbs backed off on her position to repeal the law, signing a fiscal 2024 budget that keeps the program intact. That move drew a rebuke from public education advocate Save Our Schools Arizona. 

“This inaction will accelerate the dismantling of public education, bankrupt our economy, and siphon desperately needed funds for schools and other essential public services,” the group said.

In the wake of the latest cost estimate, Hobbs tweeted the program is not sustainable in its current form and vowed to “work tirelessly” to end “this out of control and unaccountable spending.”

The nearly $18 billion fiscal 2024 state budget has about $500 million appropriated for the program, according to Chuck Essigs, director of government relations at the Arizona Association of School Business Officials. 

“For fiscal year 2024, the legislature certainly does have the resources to increase funding to cover that program,” he said. “The question would be is there more out there that’s coming and what about future years when we have a downturn in the economy or a recession or something and state revenues drop?”

Accurso’s memo pointed out that many students now enrolling in the program are coming from public schools, which saves the state money because the scholarship accounts “are funded at a lower percentage than the state aid for a pupil in the public school system.”

Back in Texas, which is awash in cash with a projected $32.7 billion budget surplus, the timing of a special session on school vouchers is unclear as the two legislative chambers remain far apart on a massive property tax cut.

The regular session ended May 29 with a number of key policy issues undecided after the Senate and House could not bridge their differences. 

The House, which blocked vouchers in past sessions, allowed legislation the Senate passed in April in an 18-13 vote to expire in committee.

Senate Bill 8 would have created $8,000-per student per year education savings accounts limited to incoming or current public school students opting to attend an accredited private school and certain students already attending private schools. The plan would cost an estimated nearly $569 million in fiscal 2025, growing to about $1.24 billion in fiscal 2028, according to a Legislative Budget Board fiscal note.

To entice legislative support in the House, particularly from lawmakers in rural areas where private schools are scarce, school districts with enrollments below 20,000 would get $10,000 for two years for each student that leaves a district via the ESA program. 

With the measure stalled in the House, another bill passed by that chamber to boost school funding with a portion earmarked for teacher raises was amended in the Senate to include education savings accounts. The amended version was rejected by the House.

“By amending the bill to include a voucher, the Senate effectively held public school funding hostage to force the House into passing a private school voucher scam and senators all but admitted this on the Senate floor,” the Texas American Federation of Teachers said in a statement.

Arkansas lawmakers combined vouchers with teacher pay raises in a bill signed by Gov. Sarah Huckabee Sanders in March. The Arkansas LEARNS Act creates “educational freedom” accounts, as the vouchers are dubbed, which will make 90% of the prior year’s statewide foundation funding per student available initially for tuition and fees at accredited private schools and eventually for home-schooled children. The bill limits the accounts to 1.5% of total public school enrollment in the first year and 3% in the second year with priority given to certain groups of children and parents.

The vouchers will cost a projected $46.7 million based on an anticipated 7,000 accounts in the first year and $97.5 million based on 14,000 accounts in the second year. In the 2025-26 school year when the accounts will be universally available, the cost is projected at $175 million.

A provision in the act allowing charter school operators to take over struggling public school districts has landed the law in court with a Pulaski County Circuit Court judge issuing a temporary restraining order in a lawsuit that claims an emergency clause for Senate Bill 294 was incorrectly passed.

The governor called the lawsuit “absurd.”

“By playing political games with our kids’ futures, the radical left is halting teacher pay raises, school safety trainings, literacy coach hiring, and our new maternity leave program — sowing unnecessary turmoil in schools,” she tweeted Friday.

Contending the bill was passed in accordance with the Arkansas Constitution, Attorney General Tim Griffin filed an appeal with the state Supreme Court.

Increased school funding was also entangled with Oklahoma tax credit legislation.

A bill signed into law May 26 by Gov. Kevin Stitt offers annual, per-student tax credits of $5,000 to $7,500 depending on household income for private school costs, as well as $1,000 in tax credits per student for qualified homeschool expenses. The Parental Choice Tax Credit program is capped at $150 million in 2024, $200 million in 2025, and $250 million in 2026 and subsequent years. Homeschool tax credits are capped at $5 million annually.

“I am so proud that we were able to empower parents and deliver education freedom; so that every student has the opportunity to attend a school that best fits their needs, regardless of their background, economic status or zip code,” Stitt said in a statement. “With this plan, Oklahoma is also celebrating record funding in our education system; including giving our teachers a much-needed pay raise, investing in literacy programs, funding our rural schools, and securing Oklahoma classrooms.”

House Bill 215, which included vouchers through a Utah Fits All Scholarship Program and teacher salary raises, was enacted in January.  It appropriates only $43.5 million from the state’s income tax fund in fiscal 2024 for up to $8,000-per-child accounts that will serve a limited number of students.