Lawmakers debate the cost of private-school scholarships

By: - January 19, 2023 5:32 pm

Democratic lawmakers are asking Republicans to wait until the Legislative Services Agency publishes a fiscal note on the governor's private school scholarship plan before moving forward on the legislation. (Photo illustration via Canva)

Iowa lawmakers sparred Thursday over the cost of Gov. Kim Reynolds’ private school scholarship plan, which is on a fast track through the Statehouse.

Democrats said the program would siphon hundreds of millions of dollars away from Iowa’s public schools. Republicans argued the plan gives public schools access to new money they would not otherwise receive.

Lawmakers on Thursday wrapped up committee work on the legislation, which could be debated on the House and Senate floor as soon as next week.

The Senate Appropriations Committee approved Senate File 94 on Thursday with a 12-6 vote. It was a faster process than usual, with the panel holding a subcommittee and committee vote during the same meeting.

The appropriations debate focused on the cost of the program. The bill contains no caps on how many students can use educational savings accounts (ESAs), but the governor’s office estimated the program would cost $918 million within the first four years, and $341 million annually once fully phased in.

Democrats call for non-partisan cost analysis

But Democrats said they wanted to hear estimates of the project’s costs from a non-partisan source before moving forward. Minority party members in committee meetings this week repeatedly pushed for Republicans to “slow down” and wait for the Legislative Services Agency to release a fiscal note on the projected cost of the program.

House Minority Leader Jennifer Konfrst said Thursday that by expediting the governor’s bill, Republicans are prioritizing 42,000 potential private school students over the hundreds of thousands in public schools. By budgeting ESAs before state supplemental aid for public schools, she said public school students are being given the “second bite at the apple.”

“They’re putting private school kids ahead of public school kids,” Konfrst said. “So they’re saying, ‘We’re gonna take the private school money off the top, and then whatever’s left you have to work with for the rest of the state budget.'”

The ESA program would provide Iowa students with $7,598 each year to use for private school tuition and associated costs. Public school districts would receive an estimated $1,205 for each student living within the boundaries of their district who attends a private school. even if they have never been enrolled in a public school.

If the bill becomes law, all public school students will be eligible to use an ESA starting in the 2023-2024 school year. Grade 1-12 students currently enrolled in private schools would only be eligible for ESA funds in the first year if their family income is at or below 300% of the federal poverty line. In year two, that eligibility would expand to family incomes at or below 400% of the federal poverty line, before phasing to no income requirements from year three on.

GOP senators disagreed with Democrats’ calls for more financial information, citing the governor’s office calculations used to account for the program’s cost when creating this year’s state budget.

Sen. Tim Kraayenbrink, Senate Appropriations chair, argued the plan provides more funding for public schools, not less as Democrats have argued. The proposed $1,200 given to public school districts for each private school student in its area will benefit public schools, he said.

Republicans promise additional per-pupil aid for public schools

That money does not kick in until the second year of the plan. But Kraayenbrink, R-Fort Dodge, said Republicans plan to make up for that by approving an additional 0.5% in per-pupil state aid.

“If a child now goes to a private school in a school district, the public school gets nothing financially for that child,” he said. “… Each one of those (private school) kids, when this is fully implemented, will be counted on the local school, the public school, and receive that $1,200 for those students that are in in private school, which previously nothing was going to that public school.”

Other Republicans pointed to “flexibility” measures included in the scholarship legislation to allow school districts to divert unused categorical funds for teacher salaries and bonuses.

But Democrats said these measures do not make up for Republicans’ lack of education funding in previous cycles. Iowa’s education funding hasn’t kept up with inflation, Sen. Molly Donahue argued, and the $918 million in “new spending money” going toward private schools in the next four years is support the Legislature has not shown for public schools.

“Every dollar that is given to the private schools is a dollar that cannot be invested in public education,” Donahue, D-Cedar Rapids, said.

The appropriations committee meeting was the final step for the legislation before it can be considered on the Senate floor.

House bill bypasses appropriations committee

The House skipped that step. Republicans voted earlier this week to change chamber rules to allow legislation approved by the newly formed Education Reform Committee to be exempt from reviews by the Appropriations or Ways and Means committees. The Education Reforme Committee approved the legislation Wednesday; House File 68 will be eligible for floor debate Monday.

House Speaker Pat Grassley said he expects the House will debate the bill “early next week.”

Grassley, R-New Hartford, disagreed with characterizations that House Republicans have not been transparent about the costs of the program by not putting the legislation through the typical appropriations process. He said the Republican caucus has spent significant time talking about the plan’s finances in meetings.

“We take this very seriously, whenever we look at any sort of investment like this, and there has been significant time not only since we got to session, but leading up to session, on what potential proposals would look like,” he said. “So it’s not like we just started yesterday having that conversation.”

Republican and Democratic caucus meetings are not open to the public.

In previous years, scholarship bills failed in the House because of insufficient Republican support, as lawmakers from rural districts said the ESAs would hurt rural school districts. But Grassley said with 24 new members in the Republican caucus, many of whom campaigned on private school scholarships, he believes the discussion will look different.

But having so many new legislators taking office this session was another reason why Konfrst said this bill was being pushed through too quickly.

“There are 39 members in the Iowa House of Representatives who weren’t here 14 days ago, and are now having to vote on a very complex bill … that they haven’t even really had a chance to absorb,” she said.

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Robin Opsahl
Robin Opsahl

Robin Opsahl is an Iowa Capital Dispatch reporter covering the state Legislature and politics. They have experience covering government, elections and more at media organizations including Roll Call, the Sacramento Bee and the Wausau Daily Herald.