Ep. 257: The Monthly Debrief – May and June 2021 Recap

June 30, 2021

In this episode of our Monthly Debrief series, we discuss school choice happenings across America—including new state programs and expansions of pre-existing programs.

Robert Enlow: Ladies and gentlemen, welcome back to another Monthly State Debrief podcast with your focused state investment team, or what we call FSI team here at EdChoice. We’re going to give you two months in a row. We’re going to give you May and June to catch up so that we can get everyone up to speed with where we got through most of the sessions in America, in the legislative sessions. So what’s going to be interesting is we go from the not much going on, except implementing the great laws that passed already, to the still things are meandering their way through the legislature, to Jason will go over the multiple, multiple actions in May and where they ended up in June. So, why don’t we take it in that order and start with Lauren Hodge about what’s going on in your states and where’s the implementation in West Virginia?

Lauren Hodge: Thanks so much, Robert. So happy to be here with you all this afternoon, or whatever time it is that you are listening to this podcast. So I am unfortunately on the not much movement in the states because after a record year in West Virginia, I’ll be honest, it’s nice to have a little bit of breathing room so that we can turn our focus into that really important work that’s happening in West Virginia with implementation. So for the states that I’m looking at, we didn’t see much. There are still some plays that are available that we may see come out of North Carolina. As you may or may not know, North Carolina has several programs, two for special needs and one that is income-based. So we may see a push there for expansion efforts. There are certainly bills that have been filed that have made the crossover deadline. North Carolina is still in their budget process, which I think you’ll hear as a theme throughout this podcast, is another way that we’re seeing some of these movements and these bills happen and these programs be implemented.

So we are still keeping our eye on North Carolina to see what comes out of there, if anything, but then really looking at West Virginia. So as you all know, they passed the most expansive program in the nation this past session, really big thinking there in the mountain state. They are taking big swings and we’ll see. With any program, the next most important step is how do you get it done? So that’s what we’re seeing come out of the mountain state right now, as those rules begin to be brought up, as that board that’s going to come out of treasurer’s office begins to be formed, and that really important part of the process of implementation begins to play out. So we’ll be working with our local partners there, providing expertise and guidance where appropriate and where asked for, but really excited to see the bold thinking and bold dreaming of West Virginia began to take some real shape.

Robert Enlow: Lauren, when you talk about implementation, so it’s one thing to get the bill passed, but it’s like an iceberg. 10% of the work starts to get the bill passed and 90% is in making sure that it works over time. And that’s great that we’re doing implementation work in West Virginia. The same thing’s going on in Indiana, where as you all know from previous podcasts, the state of Indiana dramatically increased its scholarship program from 150% of free and reduced price lunch to now 300% of free and reduced price lunch, meaning that basically 88% of the families in the state are eligible to receive a scholarship. We also got rid of the voucher amount tiering. It used to be there was 50%, depending on your income, 70% of the voucher or 90%. Now everyone just gets 90% of what the state would set aside.

So as we did that, we also passed an ESA program for special needs families. So all of the implementation on the ESA programs are really ramping up, and we’re certainly ramping up here in Indiana. So it’s great to hear that there’s still a little play in North Carolina, but that the work in West Virginia is continuing apace. So thank you, Lauren. Moving on to what I guess I’d call the states where there’s a little cool burn going on. So Jordan, why don’t you tell us about the states that you’re working in?

Jordan Zakery: Yeah, Robert, early May and early June, there’s been a lot of action in some of my states, some big things. I want to talk about Missouri briefly. Missouri passed two tax credit ESA pieces of legislation. They’re essentially the same, except one has a $50 million cap and the other has a $25 million cap. Both pieces of legislation would create Missouri empowerment scholarship accounts, and these are tax credit funded ESAs. Both of these would be available for students who live in either a charter county or a city that has more than 30,000 inhabitants. And they prioritize low income students. Right now, it’s a waiting process. We’re waiting for Governor Parson to sign one of them into law. But there’s more than that. There’s a couple other states that had some big news.

Iowa was another state. They were hoping to get a publicly funded ESA pass, but they still kept chugging along and fighting, and they were able to expand their current tax credit program. So that saw their cap raise from 15 million to 20 million and that saw the credit amount raise from 0.65 to 0.75. So there’s been some expansion all throughout the Midwest, but there’s other states too. The northeast, they’re seeing some growth. They’re seeing some great news when it comes to school choice.

Recently New Hampshire saw a huge win for families needing more educational opportunity. I mean, big. Governor Sununu signed a budget, which contained education freedom accounts. So this was after a vote of 208 votes to 172 no votes in the House and 14 yes votes and 10 no votes in their Senate to accept the committee of conference report. This program will see the state contributed adequate education grants and the differential aid follow the student to the tune on average of a $4,600 ESA, or education freedom account. Households that have incomes equal to or less than 300% of the federal poverty guideline will qualify uses for these accounts will include tuition, tutoring, textbooks, curriculum, and more. This is essentially a very broad and robust ESA program, one of the most broad and robust ESA programs in the country. And it was really a group effort and a tremendous victory for the families in the granite state.

Looking back on who was involved, I think about the parent advocates that really, really showed out to the State House and talked to everyone and educated them about education freedom accounts and legislative champions like Glen Cordelli, Jeb Bradley, Rick Ladd and others. Not only is this a game changer for the granite staters, I see New Hampshire’s story as a wonderful example for other states looking to offer families unencumbered educational choice in the near future.

And then Pennsylvania, they are in the middle of their session. They started a little late, but they’re also chugging along. Currently, there’s a couple of different pieces of legislation out. Senate bill one would pass the appropriations committee in the Senate, and that would see an increase to the educational improvement tax credit program from $135 million cap to $185 million cap, and an increase to the opportunity scholarship tax credit program from $55 million to $150 million. So we’re getting into summertime, but sessions are still chugging along. I think we’ll turn that over to Jason and he can talk to us a little more about what’s going on in his states.

Jason Bedrick: Thank you, Jordan. And yeah, there is just a ton going on across the country throughout May and the first half of June. So I’ll start with the states that have passed legislation. Florida had just an absolutely massive expansion of their tax credit scholarship voucher and ESA bill. Last month, Governor Ron DeSantis signed HB 7045, which expanded all the programs. It actually combined some programs as well. So, the Gardiner ESA program has now been combined with the McKay voucher program. Both of those are school choice programs for students with special needs. They have been rolled into the family empowerment scholarship, which is a voucher. So now with the family empowerment scholarship, we’ll have an ESA component for students with special needs and then a voucher for low and middle income families. They also on that and on their tax credit raised the income eligibility threshold to 375% of the federal poverty line. I think that’s about three-quarters or more of students in the state are now going to be eligible.

Very important, they also eliminated the prior public requirement. So no longer does a family have to enroll their child in a public school first before they are able to benefit from this program. If they think that their child is going to have their needs better met at a private school, they can immediately send their child to that private school and still qualify for the program.

Moving a little bit north to Georgia, Governor Brian Kemp signed SB 47, which expanded eligibility for the state’s voucher for students with special needs, and it also expanded the eligible categories of expenditures. So no longer is it just for private school tuition. It’s also for tutoring, uniforms, transportation, meals, summer school programs, physical speech and occupational therapy. So it is not quite an ESA, but it is definitely what we at EdChoice call a voucher plus program.

Moving onto Kansas, Governor Laura Kelly signed HB 2134, which expanded eligibility for the state’s tax credit scholarship program. That program used to be what’s known as a failing schools model. We’ve talked on this podcast a number of times about the problems with that model, especially in this case. The students were eligible if they were assigned to one of the 100 lowest performing schools in the state. Now the thing is, that can change. The ones that are at the very bottom are pretty consistently there, but there are a bunch that are just around that 100 school cutoff. Sometimes they’re in, sometimes they’re out. It causes confusion in terms of who is or isn’t eligible.

And just more importantly, a student might be assigned to a low performing school, but be thriving there. In another case though, a student might be assigned to a school that on average is very high performing, but it’s just not a right fit for that child. So it’s important that every single child has access to a school that is the right fit for them. What they have done is they have now changed it to an income-based program where every single child across the state, no matter where they live, if their family earns up to 185% of the federal poverty line would qualify for a scholarship.

In Maryland, Governor Larry Hogan signed HB 588, which for the first time ever fully funds Maryland’s Boost voucher program at $10 million. Previously, it had been at $6.5 million. So you’ve got a lot more families that are now eligible for that.

In Montana, Governor Greg Gianforte signed HB 279. That takes the tax credit scholarship program that was the subject of the famous landmark Espinosa V. Montana Department of Revenue decision last year and greatly improves it. The program was already open to every single child in the state. However, it had almost no money in it because the tax credits per donor were limited to $150. So you needed a dozen or two donations before you even had a scholarship for one kid. They have raised the per donor cap from $150 to $200,000. Additionally, they have raised the escalator on the program that allows it to grow automatically over time from 10% growth per year to 20% growth per year. So we’re looking forward to great things from that program. In the next year, it’s going to be able to serve a whole lot more students than it’s been serving.

Recently in Nevada, the legislature passed AB 495. That’s a bill that expands the state’s tax credit scholarship program by increasing the tax credits available by about $5 million. A few years ago, the legislature limited the program only to students that were currently receiving scholarships. They said, no more new scholarship students. That is gone, and that bill is pending the governor’s signature.

In Oklahoma, Governor Kevin Stitt signed SB 1080, which also expands that state’s tax credit scholarship program, raising the total number of tax credits from a 3.5 million to $25 million. So, that’s just absolutely a massive expansion. That’s all for the states where both chambers passed something. There are still a whole bunch of states out there where things are moving.

So in Arizona, SB 1452, which expands eligibility for the state’s ESA program, had previously cleared the Senate. It has now cleared the Arizona House rules committee. They are still waiting for the full legislature to vote. And in Illinois, we had been aiming to make the program permanent. Currently the tax credit scholarship program is facing a sunset, where after about another year it’s set to expire. It was not made permanent, but it has been extended for one additional year, so there’s that. Louisiana had HB 556, which would create a new ESA for students that are children of active duty members of the US military or had been adopted through the state’s foster care system or whose parent or guardian had applied for an interdistrict public school transfer and been denied. That passed nearly unanimously, 96 to one in the House. It has since cleared the Senate education committee, but we hear that it is currently tied up in the Senate finance committee. So more on that hopefully at a later date.

Also, the Ohio Senate passed a budget that had a whole bunch of school choice expansions, including expanding their voucher program, creating a new tax credit scholarship program and a new personal use tax credit. That’s pretty much it for my states. So Robert, not so much to report for this month, but hopefully next month we’ll have more good news.

Robert Enlow: You say that, except this year compared to 2010/’11, which was the year of school choice, this is the year of educational choices, we’ve been saying. The Wall Street Journal has quoted us on that, and so have so many other places. We’ve had 14 states that have five brand new laws, 14 expansions. It really could be a bigger year. It’s not just the live free or die state, now it’s the education freedom or die state. And the great thing is, is in New Hampshire, the great thing is, is the conversation is about universality. It’s not about limited. I mean, while there’s still programs out there, the conversation now is really about the educational choice for all and not just for some. And I think that’s really important as we look at issues like red lining and we look at issues like where people lived and go to school based on the value and quality of their home.

So I think when you look at educational choice for all, it shouldn’t just be for those who are needy, although we definitely want to make sure that they are the primary focus in many ways. But look, families in suburban areas who are constrained to places where they live don’t have the right services a lot of times, particularly if you have a special needs kids. So, we’ve always got to think and put ourselves in the eyes of parents in schools. And parents definitely want options and students need options. And that’s why this year has been so good. We at EdChoice have been so excited to be part of a lot of these movements and victories over the years, and validating the way we think about the world. So we’re excited for this year, for the end of this year. We’re looking forward to some other big victories.

We definitely think there’s going to be a growth in the number of students, a dramatic growth in the number of students taking up scholarships. But then when you think about it guys, it’s all about EdChoice shares, we’ve been calling it. The private school choice share is great. It’s important, but there’s homeschooling and there’s charter schooling and there’s micro schools and there’s pods, and then there’s interdistrict choice, and then there’s magnet choice. Really the goal here is just to eliminate the idea of where you live being a barrier to where you go to school or consume educational services. So we’re excited for that progress going forward. We want you all to continue joining us on this Monthly State Debrief podcast. We’re going to come back next month with hopefully some more victories. You can download us at all of the normal podcast places and certainly get it from our website. So thanks again for joining us on another Monthly State Debrief with your FSI team at EdChoice. Have a great day.