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SB3-School Choice: Friend or Foe????

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School choice, Education Savings Accounts, parental choice, subsidies….. SB 3 has been called all of this and more, but what exactly is it and what will it do?

The following is a list of questions about Article 1 of SB 3 by Senator Larry Taylor. Article II outlines a Tax Credit Scholarship and Educational Expense Assistance Program and will not be covered. These questions and their answers will hopefully help the reader to have a better understanding of the bill.

Who is eligible to participate?
A child that attended public school the year prior.
A child who will enter Kindergarten or 1st grade for the first time in the fall of 2017.
With Kindergarten and First Grade children entering the program in the fall of 2017, home schooled children can be part of the program without ever having attended public school. A child who has never been in public school, are in second grade and above who want to participate would have to enroll in public school for the year prior to the start date of their participation.

Eligibility to participate stops three months after the date the child graduates from high school or the date that the child is no longer eligible to attend a public school. They also become ineligible when they enroll in public school which includes an open-enrollment charter school. The comptroller can declare a child ineligible.

Natural or adoptive parents who are residents of Texas may enroll a child.

What can the funds be used for?

Tuition for:

  1. An accredited private school.
  2. A post-secondary education institution.
  3. Online education courses or programs.

Fees for:

  1. Educational therapies/services provided by a licensed practitioner
  2. Licensed private tutor/teaching services
  3. Classes and/or educational services provided by a public school
  4. National nor-referenced exams including SAT and ACT
  5. Textbooks
  6. Curriculum. (A course of study for a particular content area or grade level.)
  7. Costs of computer hardware/software/technological devices, not to exceed 10% of the total amount paid to the participant’s account that year.
  8. Any expenses charges by the bank to administer the participant’s account.

How much is allotted per child?

90% of state average Maintenance and Operation expenditures* for special needs students.This amounts to about $7,800 per eligible child.
75% of state average Maintenance and Operation expenditures* for families under 200% poverty level. This amounts to about $6,500 per eligible child.
60% of state average Maintenance and Operation expenditures* for families over 200% poverty level. This amounts to about $5,200 per eligible child.**

The question has been asked here, “Aren’t the public schools going to lose a lot of money when they lose the M&O amounts from children who leave?” The answer that has been given is: “No, the school will continue to receive money for the child that is in the district, but has left.” This is right, but is not exactly telling the whole story.

According to SB3, when a child leaves the school that they should be attending and starts participating in the program, the child’s public school will receive 50% of the difference between the M&O expenditure allotment and the amount that the child receives for the first year that the child participates in the program.

*What is the definition of the maintenance and operations expenditures per student in average daily attendance? Since the daily allowance per student in SB1 is $5140 according to page 111-7 of SB1 (the Senate Budget) it can’t be this amount because it seems the math doesn’t work.

**These figures were taken from information distributed by the organizations supporting this bill together with the bill itself.

Who has the responsibility of administering the program?

The program will be administered by the State Comptroller’s office, but according to Section 29.359(f), the comptroller may contract with a private entity to administer all or any part of the program. The comptroller may also solicit and accept gifts, grants, and donations from any public or private source for any expenses related to the administration of the program, including the initial implementation of the program. The comptroller will also contract with financial institutions that will administer the individual accounts.

This program will require administration, enforcement and investigation. Information on the amount of personnel and department infrastructure that will be needed to run this program is not addressed in the brochures provided by the organizations supporting the program.

How is the money dispersed and how is it accounted for?

Each participant will have an account set up with a financial institution such as a bank where the comptroller will deposit funds four times per year. An amount not exceeding 5% of the quarterly payment may be deducted from the quarterly payment by the comptroller for administration costs.

Participants must be able to access their account by using a debit card or online /electronic transfer payment service. Yearly account reconciliations are required and random audits will be conducted each year. The money will not come from federal funds or money appropriated from the available school fund.

How will the comptroller know of changes to the child’s participation in the program?

The parent who enrolled the child must notify the comptroller of changes. If the child enrolls in a public/open enrollment charter school, not later than the 30th day after the date of enrollment and if the child graduates from high school. It is the responsibility of the parent to make the notification.

What happens to the money in the account each year while the child is in school or when they graduate?

While the eligible participating child is enrolled in the program, any unused money during the current year will stay in the account and roll forward to the next year. Any unused money in the account after graduation or because of ineligibility will go into the foundation school fund.

What happens to accounts that fail to comply with program requirements?

Accounts that are out of compliance or that have substantial misuse of funds received under the program will be suspended by the comptroller. The comptroller will have the ability to recover funds distributed under the program that were used for expenses not allowed from the account holder (the parent).

Are there safeguards built-in for protection of private and home schools?
What about providers and vendors that receive payment from participants?

Section 29.365 covers protections included for the mentioned entities. Section29.365(b)(1)(2) states that providers and vendors may not be regulated nor may there be any control or supervision of a program participant, provider or vendor. (c)States that the program does not expand the regulatory authority of the state or school district on providers or vendors except those reasonably necessary to enforce the program.

Section 29.357(d) States the content or religious nature of a product or service may not be considered in determining whether a payment for the product or service is an expense allowed.

Section 29.365 (d) States that a private school may not be required to modify the school’s creed, practices, admissions policies, curriculum, performance standards or assessments to receive funds.

Section 29.365(e) States that a private school voluntarily selected by a parent for the child to attend or a parent who homeschools the child may not be required to comply with any law governing the applicable educational program that was not in effect on January 1, 2017.

What about student records and information?

The school that a child would attend is required to provide the parent or private school, if applicable, a copy of the child’s records. It also requires that the education agency provide the comptroller any information available to the agency that is requested by the comptroller about any child who participates or seeks to participate in the program.

This program is being called an Education Savings Account. Will parents be putting their own money into an account as with a Health Savings Account?

No. The money provided will come from government coffers and be put into an account that can be used for allowed expenses once a child has met the requirements of eligibility. In a way, they are savings accounts, but the money is not saved by the parent. The money is provided by the government through tax dollars.

Who are some of the groups supporting this legislation?

Texas Association of Business, Ed Choice, Texas Home School Coalition, Americans for Prosperity, Texans for Education Opportunity, Texas Business Leadership Council, Texas Public Policy Foundation.

As of the writing of this article, SB3 has not been scheduled for a hearing in the Senate Education Committee.

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