Private school scholarship program: Fulfilling parental choice or draining public school funding?

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Graphic by Katherine Kealey

Estimates are according to the Legislative Services Agency fiscal note and do not include costs to administer the program.

Republican state legislators predict Iowa’s healthy economy to cover the multi-million dollar costs associated with Gov. Kim Reynold’s private school scholarship program, while Democrats anticipate the act to only benefit upper-class families and lead to the depletion of public schools.

Students can apply for an education saving account for students which uses public dollars to attend private schools. Republican Sen. Jesse Green said the state’s revenue is strong enough to support the estimated total of $107 million within the first year of implementation.

This cost equates to 14,068 students applying for the program in 2024, according to fiscal analysis from the nonpartisan Legislative Service Agency. House File 68 passed in the Iowa House and Senate and Gov. Kim Reynolds signed the bill into law on Tuesday.

“I am not afraid of being able to afford this in Iowa,” Green told the Iowa State Daily.

The legislation allots $7,598 per student toward private school tuition and related costs. Every Iowa student within the public school system is eligible for the savings account. Estimated expenses for the program will increase to $355 million by the year 2027.

At first glance, Green said a lot of concerns and hesitations from constituents with the total price of the bill are misconceptions. In Iowa, there are three sources of funding for public schools, including federal dollars, property taxes and state aid. Green said when he tells constituents this, it eases their concerns regarding the cost.

“When you look at the revenue estimating committee, we consistently get revenues that are higher than what the estimating committee generally comes up with our conservative estimates,” Green said. “It is ironic that the cost of this bill after implementation is going to be about the same as our increased revenue that we weren’t even expecting because of the health of our economy.”

Iowa’s current budget has a nearly $2 billion surplus for the general fund. Democrat Sen. Herman Quirmbach said the state revenues would decline in the coming years due to the largest tax cut in history from the 2022 legislative session, according to reporting from the Iowa Capital Dispatch.

“The program that they passed last night will cost us over $300 million a year,” Quirmbach said. “I don’t know where they are going to get that, except from shortchanging public schools and, by the way, also shortchanging the universities.”

As for students already enrolled in private schools, there will be a phase-in process based on family income for the first two years of the program. In year one, households with students attending private schools with an annual income less than or equal to 300% of the poverty income guidelines. During this first phase, the act accounts for 6,013 non-public poverty level qualifiers, and year two accounts for 2,684.

The poverty level will increase in 2025, and $295 million is the estimated yearly cost.

“There isn’t much of an income limit anyway. In the second year, they mention the poverty level, but it is 400% of the poverty level,” Quirmbach said. “400% of the poverty level for a family of four is $111,000. That ain’t poor.”

Quirmbach said by the fourth year of the program, 85% of the funds will go toward families who can already afford private school tuition for their children.

“This isn’t about helping low-income kids,” Quirmbach said. “This is about subsidizing the middle and upper-middle-class parents who are already able to pay for private school.”

Green said public school funding is not “discriminatory” against income. Therefore, there is no reason students attending private schools should be treated differently.

“I don’t think it is right for the state of Iowa to discriminate against the incomes of certain people,” Green said. “We have an investment to make in every student regardless of their background. I think this is just a healthy way to create good policy that respects every family regardless of their economic status.”

Neighboring counties Guthrie and Greene lack private schools, while Boone is home to two with private schools, according to the Iowa Department of Education. Sacred Heart School and Trinity Lutheran School are both PK-8 institutions.

Story County is home to two private schools. Ames Christian School serves from kindergarten to sixth grade, and St. Cecilia School serves students from preschool to sixth grade.

Counties without private schooling reflect parents who are content with the public schools already there, Green said.

“There is a chance there will be new private schools in those areas because there is going to be increased competition, but there is a chance that constituents are so happy with those schools that no new private schools come up,” Green said. “…I guarantee that there will be new private schools in the state of Iowa, but where they are at will be determined by the citizens, not by the government.”

Quirmbach said over the last six years, increases for public education, including the regent universities, have not kept pace with rising costs.

“Gov. Reynolds’ priorities are private schools for the few at the expense of public schools for the many,” Quirmbach said.

Education legislation on the horizon

Another goal of Reynold’s education package is to require transparency in the school curriculum.

Now that the private school funding legislation has passed, Green said many of his concerns about school transparency are not as strong. Green said parents in private school environments are able to hold private institutions accountable.

“We have empowered parents with dollars so that their interest will be respected more by the different educational institutions,” Green said. “I think that is going to solve a lot of these curriculum issues or social problems that we keep seeing within our schools.”

Reynolds said in an interview with KCCI that transparency legislation would only apply to public schools. Green said he does not have any concerns about the curriculum within private school districts.

“I am excited to see how things play out now,” Green said. “This (school scholarship program) has been such a heavy issue for the last few years that I think it hampered other legislation from crossing the finish line. With this issue now gone, out of the castle, I really look forward to seeing how this plays out on other issues and the success of other bills.”