Hamilton Herald Masthead


Front Page - Friday, April 26, 2019

ESA bill written to thwart legal challenge

Tucked away on the very last page of a recent House version of the Education Savings Account (ESA) bill are 28 words: “A local board of education does not have authority to assert a cause of action, or intervene in any cause of action, challenging the legality of this part.”

In other words, this language would forbid local school boards from going to court and claiming ESAs are illegal. Other legal details remain, including a provision on immigration status and a Tennessee constitutional requirement that the state maintain a system of public schools.

Lawmakers also are dealing with two different versions of ESA legislation, which would allow eligible parents to use state education funds to help educate their children outside of the public school system.

On average, per child, an ESA would shift some $7,300 in state money to parents to pay for approved educational expenses such as private school tuition. Under the most expansive version of the bill, 30,000 students could eventually receive ESAs after students begin to be enrolled in the program by the 2021-22 school year.

If each student received the current average amount, $7,300, the total would be $219 million each year at full enrollment of 30,000. Enrollment is phased in over several years.

Lately, it seems, amendments to the ESA bill have been popping up like dandelions. The bill might end up in a conference committee where selected legislators will work toward a compromise.

Senate and House versions differ on many basic issues, including the school districts in which parents may apply for an ESA, the maximum number of ESAs, support for public schools losing students because of ESAs, measuring students’ academic progress and other accountability criteria.

Questions also remain on language in the bill that would require parents to provide documentation that they’re legal residents of the state before they could tap into an ESA for their children.

And, the Tennessee constitution “recognizes the inherent value of education and encourages its support.” It also requires the General Assembly to “provide for the maintenance, support and eligibility standards of a system of free public schools.”

Former state Rep. Craig Fitzhugh, who represented a rural West Tennessee district for 24 years, says ESAs, by shifting funds that maintain schools to parents for use for other education options, could violate that part of the state constitution. Fitzhugh, a Democrat and former House minority leader, retired last year after unsuccessfully seeking the Democratic nomination for governor.

Lawmakers were set to work through the ESA details this week, with a vote scheduled for the House floor on its version. The Senate Finance Ways and Means Committee also was to take up its version of the bill.

Lt. Gov. Randy McNally, R-Oak Ridge, said that a conference committee could eventually take up differing versions of the ESA bill.

Here are areas in which the bills differ:

Eligible school districts

Initially, students were to be eligible for ESAs if their families met income requirements and were zoned to attend school in districts with three or more schools in the bottom 10% in achievement measures. This included Shelby, Davidson, Knox and Hamilton counties, the Madison County/Jackson school district and the statewide Achievement School District, with schools in Shelby and Davidson counties.

A recent House amendment included Shelby, Davidson, Knox and Hamilton counties and also provided for three years of gradually increasing grants to improve school performance in the state’s other 91 counties.

There also has been talk of restricting ESAs to Shelby and Davidson County. An unsuccessful voucher measure from several years ago would have made a similar per-student amount available to parents with children in low-performing schools in Shelby County.

Currently, 43 of the state’s 82 priority schools – those in the bottom 5% – are located in Shelby County.

In the House version, students must continue to live in the school district with low-performing schools to remain eligible for the ESA. The Senate version allows students to retain ESAs as long as they live in Tennessee.

Maximum number of ESA students

Both House and Senate versions call for a maximum of 30,000 students eventually receiving ESAs, and the cap for each year would increase if at least 75% of the previous year’s cap was reached. Under the House version, the cap could be reached by year four of the program; there’s a longer time frame in the Senate version.

The first version of the bill allowed a maximum of 15,000 students. In both House and Senate versions, ESAs must be issued for the 2021-22 school year at the latest.

What parents can purchase with ESA money

The Senate version allows ESA to be used to buy curriculum materials, defined as instructional educational materials for academic courses of study. This version also states the ESA can be used to pay for services provided under contract with public school, including individual classes or extracurricular programs.

The revised House version doesn’t allow ESA money to pay for certain approved online learning programs. It doesn’t mention contracting with public schools for services, although the House version deals with ESA students participating in sports at their new schools.

What happens when students leave a public school for ESA-funded educational options?

In the original House ESA bill, school districts that lost students because of ESAs would continue to receive state educational funding – the $7,300 per student – for the first three years that ESAs were available, subject to the legislature appropriating the money. The continuing financial support to school districts was capped at $25 million per year for three years. The $25 million would then become available for educational grants for low-performing schools.

The amended House version proposes to divide the first three years of continuing financial support between the school districts losing students to private schools and also to other districts with priority schools, namely Campbell (1 school), Fayette (1), Madison (4) and Maury (1) counties.

In the first year of ESAs, the large school districts would receive 75% of the $25 million, or $18.75 million and the smaller counties with priority schools would receive $6.25 million in annual school improvement grants. The funds would be split 50-50 in the second year, and in the third year, the larger school districts would receive $6.25 million while the smaller counties with priority schools would receive $18.75 million.

In a related development, the original ESA proposal required the state to start setting aside $25 million a year this year so there would be money in 2021-22 for schools that lose students and state funding because they had received ESAs. The governor’s latest budget proposal would take most of the $25 million that was to be set aside this year for ESA funding and use it to fight hepatitis C in prison inmates.

Student testing

Both versions require testing in English and math. The House version would require the students to take the TCAP test or a successor test chosen by the state Department of Education. The Senate version allows students to take a “nationally norm-referenced test identified by the (state education) department” in addition to the tests the House authorized.

An April 16 fiscal note says that local school districts would bear the cost of administering state assessments to ESA students, at an estimated per-student cost of $73.34. At full enrollment of 30,000 students, with all of them taking the state tests, the cost would be about $2.2 million.

The total with first-year enrollment of 5,000, as set out in the Senate bill, would be $366,700.

Service fees on ESAs

Both versions allow the state to deduct 6% from the ESA to cover its costs of administering the program. Another 2% can be deducted to pay financial institutions to set up the debit cards that will provide the funds.

If both deductions are taken, it would reduce the amount of the ESA by a little under $600 on average.


The House bill allows the state comptroller’s office to audit the ESA program, specifically saying it may examine student eligibility and ESA expenditures.

The House also provides for criminal prosecution for those who knowingly use the ESA for unauthorized expenses. The Senate version provides for audits by the comptroller but not for possible criminal prosecution.