The House Finance Committee has been considering SB 193, establishing an Education Savings Account (ESA or voucher) program, as it passed the House passed a version of the bill on January 3, 2018.  While the Finance Division II subcommittee has been hearing testimony on the bill for weeks, House Finance and House Education Committee leadership have been working behind the scenes on a new amendment.

Yesterday afternoon the authors – Reps. Umberger, Ladd, Kurk, and Wolf – released their proposed amendment.   The House Finance Division II subcommittee will meet Wednesday, February 28, for the first discussion of the amendment.  The Division II meeting will start at 10:00 AM but there are four bills on the agenda so there is no set time at which SB 193 would be discussed.

The Division II subcommittee may further amend the proposed amendment and then will send its proposed amendment to the full Finance Committee.  There will be additional discussion and possible amendments there.  The public hearing on the new proposed amendment will be on March 9 at 1:00 pm in rooms 210-11 of the Legislative Office Building.

The full Finance Committee will vote on the proposed amendment on March 13 and send it back to the House floor.  March 22 is crossover day, the last day the House can act on all House bills, so the House will vote on SB 193 on March 21 or 22.

There are a number of points to make about the proposed amendment but it’s only fair, even as a firm opponent of the bill, to say that the changes are extensive and detailed and are an honest attempt to respond to some of the many criticisms of the bill as it came to the Finance Committee.  It is also true that these tweaks cannot turn a fundamentally bad idea that undermines the viability of public education into a good idea.  Here are the highlights.

The stabilization fund is gone and, with it, the State’s commitment to pay any material share of the cost of the voucher program SB 193 would create.

Instead of 5 years of stabilization fund payments to the school district for all impact over 1/4% of the district’s budget, the State would now pay a “one time adjustment” of only $1,500 per student who leaves with a voucher.  In other words, the school districts themselves would pay for the vouchers by raising taxes to replace the adequacy payments who leave with vouchers. 

This new version of the bill introduces a district level cap on the number of students who could receive vouchers each year in any one school district:

• Districts with up to 100 students, ESA grants would be capped at 5% of the number of students who qualified for free or reduced price lunch (FRL);
• districts with 101 to 300 students, the cap would be 4%;
• districts with more than 300 students, the cap would be 3%; and,
• any one school would be capped at 5% of its students in a single year.

We will have to wait for a detailed financial analysis to understand the potential cost to local taxpayers.  However, Manchester, for example, has about 7,750 FRL students.  So under the new SB 193 amendment, 233 students could leave with vouchers each year.  Since most all of those students would be FRL qualified, Manchester could lose about $5,454 in adequacy revenue for each student leaving with a voucher.  As a result, even after the proposed $1,500/student rebate from the State,  Manchester would lose $921,301 in adequacy revenue.  And the same thing could happen year after year, amounting to over $4.5 million over 5 years.

Using the same calculations, Rochester could lose $209,566; Nashua, $553,571; Claremont, $106,760; Berlin, $75,128; and Dover would lose $142,347.

It is important to note that the cap applies only to SB 193 ESA grants.  The cap does not apply to students who leave with grants from the 2012 ETC voucher program.  HB 1686 is an attempt to expand that program significantly.  So a community that reaches its cap under SB 193 could still lose more students to the ETC voucher program. 

It’s hard to imagine how the legislative delegations from those communities, or many others, could support a bill that could inflict that kind of pain on their schools.

The eligibility criteria are significantly tighter.

Several egregious eligibility loopholes have been eliminated:

• Students entering kindergarten or first grade (even from a private school) are no longer eligible.
• The household income limit has been reduced from 300% to 185% of poverty (the qualification for FRL) in the student’s initial year of the program and the student remains eligible only as long as household income is less than 300% of poverty.
• Students with IEPs or 504 plans would no longer automatically be eligible.
• Students no longer become eligible by applying and getting turned down by a charter school or the 2012 ETC program.

Attendance at a low performing school (vaguely defined) is still there as an eligibility criteria, so students in those schools would be eligible regardless of income level, increasing the impact on communities that already tend to be the most property poor communities least able to support their education systems.

The criteria for education service providers have been tightened .

And, whereas a qualified “tutor” could have been anyone under the House passed bill, the new proposed amendment says that a “Service provider means a licensed professional who contracts with an Education Savings Account recipient to provide educational instruction.”

Accountability has been tightened.

The ambiguous and conflicting accountability language in the House passed bill has been replace with a requirement for

“either a nationally standardized norm-referenced achievement test, the statewide student assessment test, or an evaluation completed by a certified teacher or a teacher currently teaching in a nonpublic school, who is selected by the parent, or other valid measurement tool mutually agreed upon by the parent and the commissioner,”

There is still too much wiggle room here and no assurance that the State is paying for the adequate education required by our Constitution.

Funds could be used for public and what’s called “parent directed” education as well as for private school tuition.

References to “home school” are removed and replaced by “parent directed.”  The new new proposed amendment no longer says that a student is being paid to leave public school.  Instead, a parent could use the funds toward public school tuition or other costs as well as for private school tuition or education services, defined more tightly than before.

Significant changes for the scholarship organization.

The bill as it passed the House implicitly designated a New York organization called the Children’s Scholarship Fund as the scholarship organization to manage the program. The scholarship organization must now be selected through an open RFP process administered by the department of education.  There are, however, no criteria established for selecting the organization.

And the proposed amendment now says that the scholarship organization may receive “up to” 5% for administration, though it is not clear how the level of compensation would be determined.

And, whereas the House passed bill would have given the scholarship organization a seat on its own oversight committee (!), the amendment to be presented to the Finance Committee restructures that committee and eliminates scholarship organization participation.

ESA grants could not be stacked with grants from the 2012 Education Tax Credit program.

Applications to participate in the ESA program would be accepted on a limited schedule.

Where the bill as it came to the Finance Committee would have allowed students to leave public schools unpredictably year round, the newly proposed amendment would require that the scholarship organization accept applications for the next school year only through May 1 of the previous school year and to notify school districts of ESA awards by June 30 of that previous school year, unless the education commissioner certifies an exception in a special case.

Improved program reporting is required.

As the bill came to Finance, it required no meaningful reporting about program operations.  The newly proposed amendment requires many more details, including the dollar amount of each scholarship to each student at each school, analysis of student growth and achievement for scholarship students compared to peer groups, the school district each student left and the reason, the number of students returning to public schools, and other financial aid provided to ESA students.

Special education language is clarified.

The amendment says:

Participation in the program shall have the same effect as a parental placement of their child under 20 U.S.C. section 1412(a)(10)(A) of the Individuals with Disabilities Education Act (IDEA). The district of residence is not liable for the cost of a nonpublic school if a free and appropriate public education is available in the public school and a parent enrolls and pays for the student to attend a nonpublic school pursuant to 20 U.S.C section 1412(a)(10)(A). A parent who accepts an education savings account for his/her child who is eligible for special education but not currently receiving services due to the child no longer attending the assigned resident public school shall be eligible to receive a “services plan” developed and implemented in accordance with 34 C.F.R. sections 300.137 through 300.139 that describes the special education and related services that the resident local education agency will provide to a parentally-placed child with a disability who is enrolled in a nonpublic school and has been designated to receive services, including the location of the services and any transportation necessary consistent with 34 C.F.R. section 300.132.

It is also the responsibility of the local education agency in which the private school is located to conduct an individualized education program re-evaluation to determine special education eligibility and to incur associated eligibility costs if the parent requests a 3-year renewal re-evaluation. Students in the special school district within the department of corrections established in RSA 194:60 shall not be eligible students.

The ESA program start date would be delayed by 1 year.

The program would get organized and begin accepting applications in the 2018/19 school year.  The first school year in which ESA students would leave with grants would be the 2019/20 school year.

It’s still a bad bill.

The amended bill tightens some of the loopholes, but places local school districts in greater financial jeopardy. A bad bill remains a bad bill that should be voted down.