This episode of EdChoice Chats is our monthly state update for February. Get the insider’s scoop on what’s happening with school choice legislation in states across the nation, and get a look into how legislatures work.
Michael Chartier: Hello, I’m Michael Chartier, our senior director of state relations, and welcome to another EdChoice Chat. On the phone with us is Jason Bedrick, who’s our policy director here at EdChoice, and we’re going to be talking a little bit about what’s going on in the states across the country, specifically to look back at what happened in February and what we might expect going forward in March.
So Jason, thanks for being on the phone with us. I know you’ve been watching the states in your job here as policy director, and I know you want to highlight two states in particular for this month: New Hampshire and Florida. So do you want to go into a little bit about what’s going on in New Hampshire and what we can expect moving forward?
Jason Bedrick: Absolutely. So in New Hampshire, we … As you know from previous podcasts and our legislative update on the blog, last year New Hampshire adopted what would have been the most expansive education savings accounts program in the country. It was open to all students who were switching out of a public charter, district school or entering first grade or kindergarten. That passed the Senate and was sent over to the House, where the House decided to take a more cautious approach. So the House retained the bill over the summer, worked on it and in the fall passed an amendment that scaled down the program considerably. So the eligibility, for example, instead of being open to pretty much all students, was only open to students from families earning up to 300 percent of the poverty line, or children who have special needs or who are assigned to a “low-performing” school district.
So in that respect, I think, still a pretty good bill. That passed the House in January by a vote of 184 to 162. Then it went over to the House Finance Committee. All bills in New Hampshire that have a fiscal note, after they’ve passed the Policy Committee and passed on the floor, are then sent to a fiscal committee. So, it went to the Finance Committee. The Finance Committee has had a series of amendments. Each amendment has scaled down the eligibility for the program and also added a number of regulations and in some cases – I mean, to be quite frank, in some cases they were rather sloppily done and nonsensical. You know, for example, requiring that all tutors that receive funds from the ESA must be licensed by the state, but the state doesn’t actually license tutors. So fortunately they fixed that. They adopted language that would allow tutors to have some sort of expertise in the area, for example, a college degree, or who taught at a public or private school, to be tutors.
So that’s at least opened it up. They’ve addressed some of those concerns, but they scaled down the eligibility again. Now it’s only students who are from families earning up to 185 percent of the poverty line. In other words, those students who are eligible for a free or reduced-price lunch at the public school.
Also there is no exception for students with special needs. They’re not exempt from these income requirements. And then there’s a number of other ways where they’ve added administrative costs to the bill, scaled it down, very strict caps ranging from three to five percent of eligible students able to participate on a per-district basis, right. So if you have a district that has 1,000 students, of those 1,000 students, let’s say 200 students are below 185 percent of the poverty line in a district that allows 5 percent. So you’re only talking, you know, 10 students. Out of this district of 1,000 students, only 10 would be able to participate.
So this has gone from what, again, was model legislation, would have been, in my opinion, the best in the country. It is now, I’d say, sort of a pilot program – a step in the right direction, but it went from a giant leap to a baby step. And also it’s only grades 2 through 12, so first graders are no longer eligible to participate. You have to go to a public school first. Even though the state pays for kindergarten, they’re not counting that because it’s not compulsory, so you have to do a year in public school first, and then you can go to a private school or do some sort of homeschooling or tutoring or online class that’s using an education savings account.
So it’s … On the one hand it’s disappointing, relative to where things started and where it appeared that the Senate was at, and really the whole House after the first Education Committee vote, but on the other hand it still is a step in the right direction, and it would be significant progress. So we’re still hopeful. The Finance Committee is going to be voting next week on the 14th, same day that EdChoice is cosponsoring an event with the Josiah Bartlett Center, with Rick Hess from the American Enterprise Institute and Professor Ben Scafidi from Kennesaw State University in Georgia, who will be talking about how ESAs work, along with some families that have benefited from them or from tax-credit scholarships. And the full House is going to be voting on the second-to-last week from March, so keep your eyes on the EdChoice blog or our Twitter feed and we will be happy to update you.
Michael Chartier: Interesting. Jason, you said two things that I kind of want to unpack a little bit for our listeners here, kind of give them an insight into this process. So you mentioned that when a bill goes from a policy committee to a money committee, and in this instance the Finance Committee, it’s given a fiscal note. Can you explain a little bit about what that fiscal note is, and maybe how it’s made, and how it impacts the legislative process?
Jason Bedrick: Sure. You know, this varies from state to state, but in New Hampshire anyway this fiscal note is usually devised by the legislative budget office in conjunction with whichever department it is that’s going to be running or overseeing the program. So in this case, there were two departments—that would be the Department of Education and also the Department of Revenue—that provided, but, and in this case, primarily the Department of Education, that provided input to figure out what is going to be the cost or savings to both the states and to districts.
So any time you have a student that is receiving an ESA, who is switching out of a district or charter school, because that ESA is worth only 95 percent of what the school would have received for that student, there is a savings to the state. And if the student was not switching out of a district or charter school, then there would be a cost for the state. And so what you have to do is figure out how many of those students would be switchers, how many would not be switchers, and then make your calculations. In this case, all students must be switchers, and so it would produce a savings for the state.
Michael Chartier: I see. Well, thank you very much for that explanation. Again, we like to try to give people that might not follow this stuff as intensely as you and I do a good sort of insight into how this process works and what some of these terms of art and science for us mean.
I guess one of the other things I wanted to unpack, Jason, is that you mentioned that tutoring was originally licensed by the state in the bill, and that the state doesn’t license tutors, so they found a workaround. Why not have tutors be licensed by the state of New Hampshire? I mean, that seems, you know, we license hairdressers and things like that. Why not have that be done?
Jason Bedrick: Well, actually, I don’t think we should be licensing hairdressers, for that matter. I think there’s, in this country and in a lot of different states, there is a great deal of over-licensing. And I think, you know, certification is nice, but the main difference between certification and licensing is this: Certification means that there is some entity that is certifying that you have mastered a skill or a certain body of knowledge, and licensing is when the state says, “You may not do this activity unless we give you permission. And you can only get our permission if you jump through the following regulatory hoops.”
So most states actually don’t license tutors, and I think that’s appropriate. You don’t want the state to be in a position of deciding what body of knowledge is required to teach an 8th-grade student math outside of a classroom setting, okay?
So it makes sense if the government is going to be operating schools that they’re going to have a certain standard for those teachers. But for parents, I think you’re going to go, let’s say, to Kaplan, or you’re going to find a local college student, or something like that. To have a certification from a trusted entity, or that’s a part of a brand, like Kaplan, that’s trusted, I think that should be sufficient without getting the government involved and saying that you must be licensed, because what it essentially does is it artificially constricts the supply and then raises the cost, and if we want education to be both high-quality and affordable, then that’s not the best way to do it.
Michael Chartier: I think that makes a lot of sense. Thank you for that update. Again, it’s always nice to unpack some of these things and kind of give our listeners insight into how this legislation gets crafted, and why decisions are made and others aren’t.
So I guess just briefly, then, closing this New Hampshire part of the podcast, what do you think is on the horizon with this piece of legislation based on what you’ve heard and you’ve read in the news?
Jason Bedrick: Well, the Finance Committee has committed themselves to passing something, so it’s going to be an incredibly scaled-down version. It is causing some consternation among other members of the House, particularly with certain members of the Education Committee, that feel and have expressed publicly that they believe that the really good policy work that they did has been undone by the Finance Committee.
Generally speaking, the fiscal committees—so Finance and Ways and Means—they are supposed to limit their amendments to any bill to things that actually affect the fiscal impact on the state, right? So putting a cap on the program, that’s certainly within the purview of finance because the Finance Committee is saying, “You know, this is a nice policy, but this is, you know, we can’t spend more than X, and therefore we’re going to put a limit on the amount of money that we’re going to spend on this program.”
But tinkering around with things like licensing, you know, the eligibility level of students, that’s really entirely outside of the purview of Finance, and so there are a number of legislators—again, particularly on the Education Committee, which said, “Hey, we devised this policy, and you’re undoing our policy work.”
I can understand and appreciate their frustration. The concern is that some of them now are saying, well, they’re not going to support the Finance Committee amendments. So there’s still a possibility this thing is going to pass, but there is a lot of acrimony right now in the legislature, particularly between members of these two committees.
And so I would say, you know, the fate of this bill is not entirely clear. The picture in Florida, the Sunshine State, however, is much sunnier.
Michael Chartier: I see. Well, you know what, Jason, I’m going to save the Sunshine State for the end here so we can end on a nice sunny note, if that’s okay with you.
Jason Bedrick: By all means.
Michael Chartier: I’m going to go through quick updates in Iowa, West Virginia and South Carolina, then we’ll round out with Florida.
So in Iowa, we have an education savings account bill that was introduced in January and moved through the process in February and received a hearing in February that would have been a nearly universal education savings account bill that would have been switchers from public school to private school.
That bill had a hearing, was passed out of the House Education Subcommittee and moved on to the full committee and ultimately did not have enough votes to move out of that committee, and so it has died in the full House Education Committee. It will hopefully, from what I hear, have a companion bill in the Senate, and that companion bill, as I hear, will be a special needs education savings account, and that will be for all special needs students across the state of Iowa to receive the educational services that they need. I hear that that bill, looking forward, could be dropping any time in the next two weeks. So I will definitely keep an eye on that to see what happens in the state of Iowa.
Likewise, there is a tax credit scholarship increase that I hear will move in Iowa as well, and that will increase the total overall cap on the number of donations that can go to SGOs. So I’ll definitely be keeping an eye on that as well, and we will see what happens out there in the Hawkeye State.
Secondly, as people may have seen, West Virginia was having a bit of turmoil out there. All 55 county school districts’ teachers went on strike to protest increases in the amount of contributions towards their healthcare as well as pay raises. It appeared as if the stalemate was broken by the promises of pay increases for teachers and smaller increases for state employees, but that was not deemed sufficient by those protesting, and they went back on strike and then there was another series of negotiations, and it seems as if there is an overall five-percent pay increase for state employees and teachers, and that ended the strike.
What that meant for the education savings accounts bills out there in West Virginia is that those were deemed by the media to be quite hot-button issues, and the legislature has chosen to not further discuss those pieces of legislation. So we will see if anything happens with that in the remaining days of the session, but from what I’m reading it’s unlikely that anything is going to happen out in West Virginia.
Lastly, South Carolina, there is a bill, SB-4077, and since I’m the moderator I’m going to give it a little aside, but I remember that number. I’m a big M*A*S*H fan, and it was MASH4077, so that bill clearly is something that I’m going to remember, so it being House bill 4077 is the codification of the tax-credit scholarship bill that has been in place in South Carolina, a tax-credit scholarship bill for special needs students. What happened there is that that program passed in the budget, and had to be subsequently passed in every single budget that has moved forward in that state.
And what I mean by codification of that language is that they’re going to actually add it to the overall code of South Carolina. And the code is all of the pieces of legislation that have been passed that make up the body of laws in the state of South Carolina. So they’re going to just simply add that to the laws of South Carolina and not just pass it within the budget.
So that’s moving through the process right now. There are some, I hear, some technical changes that are going to happen in that legislation, and our own Leslie Hiner, who’s in charge of our legal affairs department, is definitely monitoring that situation and offering insights when asked by the committees in South Carolina.
So that’s what’s going on in those three states. And Jason, you know, the weather has turned cold here in Indiana. We’ve had some warm days, but the weather’s turned cold here again and we’re below freezing, so why don’t you take us to the – to sunny Florida and tell us what’s going on down there as we round out this edition of our state update podcast?
Jason Bedrick: Well, Florida has certainly been the bright spot this year, and so there are two bills right now that are working their way through the legislature. In fact, one of them, HB-7055, actually passed both chambers and is awaiting signature by Gov. Rick Scott. That bill was over 200 pages. It was sort of their education reform omnibus bill. So it does a whole bunch of different things, and we can’t get into all of them on this podcast, but I would say three things that are most important for our concerns.
One is that it created a new Hope Scholarship Program, which is – it’s just like their existing tax credit, except it’s for students who are victims of bullying or abuse, and so this is the first program in the country that is specifically tailored for victims of bullying. And that, I think, is very important. Prof. Kevin Currie-Knight and I published a piece earlier last year where we talked about the needs of bullied students and why school choice is a really good option for them, because it does two things. First, it provides an immediate escape hatch for bullies.
You know, for example, in New Hampshire, just to go back to the frozen tundra of New Hampshire which is right now buried under snow, in New Hampshire they have something called material hardship for students who are bullied. But it’s a process that takes many, many months to resolve and requires parents going to a whole number of different meetings and jumping through all sorts of hoops. And then ultimately the fate of your child is decided by some committee. But the problem there is that, that entire time, the student is still in the school that is immediately unable to protect him or her from bullying. And so now the Hope Scholarship provides a more immediate escape hatch.
But secondly, I think what’s really important is that when you empower people with choice, you also empower their voice, which is to say this: If a school knows that any student who is being bullied is going to have the opportunity to take their money and leave, that creates a very strong incentive for the schools to take bullying more seriously and to actually address these problems when they arise. So it might be the case that the Hope Scholarship actually not only provides an escape hatch for these students who are being bullied but actually reduces the level of bullying in the district schools. So I think this is a very positive development.
Also, the two bills provide more money, about $25 million more, so it’s slightly less than a 25 percent increase in the funding for the Gardiner Scholarship Program. That’s Florida’s education savings account for students with special needs, and also for their tax credit, it allows them to tap into more than $50 million more from the sales tax, the state sales tax. So it increases funding, which means that more students, particularly low-income students, participating in the tax-credit scholarship program, and students with special needs participating in ESA, are going to have access to funds.
Michael Chartier: I see. Well, thank you, Jason. That was a very in-depth update, and thank you for covering all of those topics. I think we’re out of time here, and hopefully we’ll tease some of our listeners to come back again next month to listen to our podcast and hear about what’s going on in the states as we look back at what happened in March and hopefully look forward to what’s happening in April, as there are states that are still having their sessions continue on into April.
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