by (in alphabetical order) John Garrett Clawson, Cassie Davis, Katherine Floyd, Reynaldo De La Garza, Victoria Keller, Sarah Pollock, Laurie Roberts,
Started: September 6, 2016. Last updated: NovemberSeptember 820, 2016
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Definition
Education Savings Accounts (ESAs) are a /wiki/spaces/edpolicy/pages/27033626 mechanism that puts state funding for educational expenses in the hands of parents. Funds are calculated based on the amount the state would have spent on a given student in their public school. That money is placed in a debit account, from which parents can access and use the funds for a variety of public and private education services.
In Texas, SB 1178 outlined a proposed ESA program that may be modeled in subsequent proposals, although it ultimately failed to pass in the Committee on Public Education in the Texas House of Representatives in 2015. In 2016, the 85th Texas Senate was tasked with investigating the academic success and fiscal impact of similar programs in other states, including Arizona, Mississippi, Nevada, Florida and Tennessee (Patrick, 2016). While these programs have different names from state to state, the fundamental features are essentially the same.
ESAs share several programmatic characteristics with schools vouchers program program. The primary distinction is that vouchers can only be used for tuition, while ESAs can be used for a variety of educational expenses. Another distinction is that vouchers transfer tuition from the government to the student's chosen school, while ESA funds are controlled by parents through a government-funded debit card. Consequently, many of those that support the school voucher concept support ESA initiatives as well. Those that oppose such voucher proposals are also likely to reject ESA programs.
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Once a student is eligible, it is at the discretion of the parent/guardian to decide how the funds will be applied in order to meet the agreed requirements of the program. See below for Eligible Expenses.
Program Size and Fiscal Impact
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At the present time, legislation passed in Arizona, Florida, Mississippi, and Tennessee has been been upheld by each of those states' supreme courts. However, in September 2016, The Nevada Supreme Court struck down the state’s education savings account law, ruling that while the premise of using taxpayer money for private education is constitutional, the method used to fund the ESA program is not. The court held that the Legislature’s discretion to encourage other methods of education is not limited by the state Constitution. Moreover, the Court indicated that funds placed in education savings accounts belong to parents and are not “public funds”; therefore, ESAs are not in violation of the Constitution’s prohibition against using public money for sectarian purposes (Rindels, 2016; Chereb, 2016). This has been hailed as a victory by proponents of the legislation. However, justices said that the Legislature cannot divert money specifically authorized for public schools to private educational programs (like tuition at parochial schools). Thus, the Court held that the use of the Distributive School Account funding for ESAs undermines the Nevada Constitution’s mandate to fund public education (ibid). Proponents believe that this constitutional issue can be resolved through legislation revising the flow of money into ESAs. In light of this, the state’s Republican governor has indicated that he will prioritize the issue of ESA funding in the 2017 Legislature when it convenes in February (Chereb, 2016).
Evidence
ESAs are a new reform, and little direct evaluation of their effects currently exists. Indirect evidence, however, can be gleaned from evaluations of voucher programs. While ESAs often have fewer restrictions on eligible expenditures than do voucher programs (which are typically limited exclusively to tuition), early evidence from Arizona's Empowerment Scholarship Program has found that two-thirds of ESA disbursements are being spent on tuition. In a universal ESA program like the one proposed in Texas, it seems likely that an even larger share would be spent on tuition, so that the effects of ESAs would be similar to those of tuition-only vouchers.
A summary of the evidence on vouchers will be given on a forthcoming page.
References
Arizona. Senate. 2013. reg. sess. Phoenix. SB 1363 Fiscal Note. Schimpp, Steve. 2013.
Burke, Lindsay, and Jonathan Butcher. "Education Savings Accounts: Advancing Choice in States with Blaine Amendments." The Heritage Foundation. October 3, 2016. Accessed November 8, 2016. http://www.heritage.org/research/reports/2016/10/education-savings-accounts-advancing-choice-in-states-with-blaine-amendments.
Chereb, Sandra. “Nevada Supreme Court Strikes Down School Choice Funding Method.” Las Vegas Review-Journal. September 29, 2016.
DeForrest, Mark Edward. "An Overview and Evaluation of State Blaine Amendments: Origins, Scope, and First Amendment Concerns." Harvard Journal of Law & Public Policy 26.2 (2003): 551-626.
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O'Dell, Rob, and Yvonne W. Sanchez. "State Money Helping Wealthier Arizona Kids Go to Private Schools." The Arizona Republic. Last modified July 7, 2016. http://www.azcentral.com/story/news/arizona/politics/education/2016/02/23/state-money-helping-wealthier-arizona-kids-go-private-schools/80303730/.
Michelle Rindels, Michelle. “Nevada High Court Blocks Funding for School Choice Program.” The Las Vegas Sun. September 29, 2016.
Sandra Chereb. “Nevada Supreme Court Strikes Down School Choice Funding Method.” Las Vegas Review-Journal. September 29, 2016.
“School Choice in America,” EdChoice, last modified Oct. 28, 2016, http://www.edchoice.org/school-choice/school-choice-in-america.
S.B. 1178, Texas 84th Cong. (2015).
S.B. 2695, Mississippi 114th Cong. (2015).
S.B. 302, Nevada 302nd Cong. (2015).
S.B. 431, Tennessee 431st Cong. (2015).
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S.N. 850, Florida 116th Cong. (2014).