Efforts to introduce education savings accounts (ESA) to expand school choice in Iowa started in the Iowa House when State Representative Walt Rogers, the Iowa House Education Committee Chair, introduced HSB 651, entitled the Iowa Student Opportunities Act, included not only education savings accounts but expanded charter schools as well. It passed out of subcommittee, but the legislation did not survive the legislature’s first funnel deadline.

The Iowa Student Opportunities Act was reintroduced in the Iowa Senate as SSB 3206 by State Senator Charles Schneider (R-West Des Moines), the Senate Appropriations Committee Chair. Appropriations bills are not subject to funnel deadlines and since there is an appropriations component to education savings accounts they were able to reintroduce it.

The bill passed in a appropriations subcommittee on Tuesday that consisted of State Senators Mark Chelgren (R-Ottumwa), Jeff Danielson (D-Cedar Falls), and Ken Rozenboom (R-Oskaloosa).

The bill is similar to HSB 651 in that it establishes education savings accounts through the Iowa Department of Management. Like the House bill, SSB 3206 also limits participation to families with incoming Kindergarteners or students who have attended public school for two consecutive semesters before applying for an ESA.

Since it is an appropriations bill, the SSB 3206 does not include any of the charter school language the House version included.

Like the House bill, under SSB 3206, ESAs can be used for qualified educational expenses such as tuition and fees at a nonpublic school, textbooks, fees, or payments for educational therapies, including tutoring or cognitive skills training, curriculum fees and materials for a specific subject matter or grade level, tuition or fees for nonpublic online education programs, education materials and services for students with disabilities, standardized test fees, and higher education costs (excluding housing and board).

Like the House bill, SSB 3206, allows any leftover funds, after a student graduates, to be used for higher education purposes. Unlike the House bill, the deadline to use that money is 25-years-of-age, and there is no active duty military service exemption. When the student turns 25, the Iowa Department of Management will deposit any remaining funds into the state’s general fund.

The Senate bill is clearer in regards to the amount a student will receive this year. The House version’s funding formula was complicated, but SSB 3206 states, “The department of management shall assign each pupil an education savings grant in an amount equal to sixty percent of the regular program state cost per pupil for the same school budget year.”

The Senate version also offers less money. While the Senate version allowed an amount worth 60 percent of regular state cost, the House version stated the amount assigned to the students would be the equivalent of 90 percent of the following items:

  • The product of the pupil’s weighted enrollment that would otherwise be assigned to the pupil under this chapter if the pupil was enrolled in the pupil’s district of residence multiplied by the difference between eighty-seven and five-tenths percent of the regular program state cost per pupil and the statewide average foundation property tax per pupil.
  • The total teacher salary supplement district cost per pupil for the pupil’s district of residence.
  • The total early intervention supplement district cost per pupil for the pupil’s district of residence.
  • The total area education agency teacher salary supplement district cost per pupil for the pupil’s district of residence.
  • The total area education agency professional development supplement district cost per pupil for the pupil’s district of residence.
  • The total teacher leadership supplement district cost per pupil for the pupil’s district of residence.

Organizations supporting the bill are Iowa Association of Christian Schools, Iowa Advocates for Choice in Education, Iowa Catholic Conference, Americans for Prosperity, The FAMiLY Leader, and Excellence in Education in Action.

Organizations in opposition are ACLU of Iowa, School Administrators of Iowa, Iowa Federation of Labor (AFL-CIO), Interfaith Alliance of Iowa Action Fund, One Iowa Action, Child and Family Policy Center, Des Moines Public Schools, AFSCME Iowa Council 61, Rural School Network of Iowa, Urban School Network of Iowa, Iowa Association of School Boards, and the Iowa State Education Association.

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