Iowa Legislature passes bill to spend hundreds of millions of dollars for families' private school costs

The Iowa Legislature has passed a bill to spend hundreds of millions of taxpayer dollars each year to pay families' private school costs, handing Gov. Kim Reynolds a huge win on a top legislative priority that has eluded her for years.

After more than five hours of debate Monday evening, House lawmakers voted 55-45 to pass the bill, with nine Republicans defecting to join every Democrat in opposition. Just after midnight, the Senate followed suit with a 31-18 vote to send the bill to Reynolds for her signature. Three Republicans were opposed.

Reynolds waited outside the Senate chamber following the bill's passage, greeting lawmakers with hugs and selfies.

“I am thrilled that both the Iowa House and the Iowa Senate have passed the Students First Act and I look forward to signing it into law later today," she said in a statement early Tuesday morning.

The bill's passage, in only the third week of the legislative session, demonstrated Republicans' commitment to delivering a quick victory for Reynolds in her third attempt at passing the legislation. The legislation sped through committees last week as House Republican leaders worked to eliminate hurdles that had doomed previous versions of the proposal.

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"This bill is about freedom," said Rep. John Wills, R-Spirit Lake, the bill's House floor manager. "This bill is about freedom for the family to make a decision. This bill is about where that family feels that child will be best taught. This bill is not about attacking teachers. The opponents of this bill will state that we’re attacking teachers over and over again tonight. Nothing could be further from the truth."

Opponents in both chambers hammered Republicans over the legislation, arguing it would harm public education while unfairly benefitting private schools that lack accountability and can pick and choose which students they will accept.

“Spending public money with no accountability is reckless. Our public schools and students deserve better,” said Sen. Molly Donahue, D-Cedar Rapids. “Until we are willing to provide adequate funding for the vast majority of our public school students, we should not be creating a private, exclusive school entitlement program with unknown costs and unlimited funding — a blank check.”

Iowa House Majority Leader Matt W. Windschitl, left, talks with State Sen. Brad Zaun, R-Polk, during debate on a bill that would create education savings accounts, Monday, Jan. 23, 2023, at the Statehouse in Des Moines, Iowa.
Iowa House Majority Leader Matt W. Windschitl, left, talks with State Sen. Brad Zaun, R-Polk, during debate on a bill that would create education savings accounts, Monday, Jan. 23, 2023, at the Statehouse in Des Moines, Iowa.

What does the private school bill do?

The bill, House File 68, would phase in over three years and eventually allow all Iowa families to use up to $7,598 a year in an "education savings account" for private school tuition.

If any money is left over after tuition and fees, families could use the funds for specific educational expenses, including textbooks, tutoring, standardized testing fees, online education programs and vocational and life skills training.

The $7,598 per private school student is the same amount of funding the state provides to public school students and is expected to rise in future years.

Proponents of the bill say the funds would allow every family to access more options for their student's education, without financial barriers.

"This is about kids. This is about our children," Wills said. "This is about parents being in charge of their kid’s education. So let’s not lose sight of that. Let’s not lose sight of the kids in this discussion."

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Opponents argued that using state money to pay for students to attend private schools will perpetuate inequity in Iowa's education system since private schools can choose which students to accept and aren't held to the same standard of transparency as public schools.

Rep. Heather Matson, D-Ankeny, likened the education savings accounts to "a backpack full of money" for private school students, while not providing any help for public school students to pay for expenses such as tutors, AP tests and ACT exams.

"Why would it be acceptable for the families receiving vouchers to receive a direct payment from the state of Iowa to use at any school — including a private or religious institution or an online school — when every other student attending public schools does not receive such a backpack full of money?" she asked.

State Rep. Sami Scheetz, D-Linn, speaks during debate on a bill that would create education savings accounts, Monday, Jan. 23, 2023, at the Statehouse in Des Moines, Iowa.
State Rep. Sami Scheetz, D-Linn, speaks during debate on a bill that would create education savings accounts, Monday, Jan. 23, 2023, at the Statehouse in Des Moines, Iowa.

Public school districts would also receive an additional $1,205 in funding for students receiving education savings accounts who live within the public school district's boundaries. In addition, the bill allows public school districts to use professional development funding to provide raises to teachers.

How much would the program cost? $345 million per year

The program is expected to cost $345 million annually by its fourth year, once it is fully phased in, according to a new analysis from the nonpartisan Legislative Services Agency.

Over the course of the first four years, the state would spend about $879 million as the program phases in.

The Legislative Services Agency's analysis predicts 14,068 students will be enrolled in the program in fiscal year 2024, its first year. That includes an estimated 4,841 students who would transfer from a public school to a nonpublic school.

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By fiscal year 2027, the agency expects 41,687 students in Iowa to receive education savings accounts to pay their private school costs. Over that time, the agency projects enrollment in public schools to drop from 486,476 in fiscal year 2024 to 475,207 in fiscal year 2027.

By the fourth year, the agency estimates public school districts will receive $49.8 million in new per-student funds for private school students within the public district's boundaries. The agency also expects a net decrease of $46 million in public school funding as a result of more students attending private schools.

The nonpartisan analysis says the cost to administer the program is unknown. The bill allows the Iowa Department of Education to contract with a third party to administer the education savings accounts, but the state has not yet issued a request for proposals from companies seeking to manage the funds.

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State Rep. Beth Wessel-Kroeschell, D-Story, speaks during debate on a bill that would create education savings accounts, Monday, Jan. 23, 2023, at the Statehouse in Des Moines, Iowa.
State Rep. Beth Wessel-Kroeschell, D-Story, speaks during debate on a bill that would create education savings accounts, Monday, Jan. 23, 2023, at the Statehouse in Des Moines, Iowa.

Stephen Gruber-Miller covers the Iowa Statehouse and politics for the Register. He can be reached by email at sgrubermil@registermedia.com or by phone at 515-284-8169. Follow him on Twitter at @sgrubermiller.

Katie Akin is a politics reporter for the Register. Reach her at kakin@registermedia.com or at 410-340-3440. Follow her on Twitter at @katie_akin.

This article originally appeared on USA TODAY: Iowa lawmakers pass Kim Reynolds' private schools scholarships bill