A bill diverting tax dollars to private education and allowing participating families to receive debit cards worth up to $7,300 in state education money each year was signed into law by Tennessee Gov. Bill Lee on Friday.
The freshman Republican governor navigated a bumpy legislative path to score his most prominent policy win yet with the voucher-like proposal. President Donald Trump and Education Secretary Betsy DeVos sent supportive tweets while it was debated in the Legislature.
Eventually, the bill narrowly emerged from fights over cost estimates and provisions that could exclude families in the U.S. illegally.
"I'm very encouraged where we're going with that piece of legislation," Lee told reporters.
According to the newly enacted law, the Education Savings Account program would apply only to the state's largest school districts — Nashville metro and Shelby County, the area's with the lowest performing schools — starting in 2021 and caps who can take advantage of it at 15,000 students over five years.
The GOP-dominated General Assembly limited the scope of the plan to Democratic strongholds after many Republican lawmakers balked at the potential consequences of ESAs applying in their own legislative district. Democratic lawmakers also objected, but their concerns were not enough to sway backers of the bill.
Under the plan, families could receive up to $7,300 in state funds each year to spend on private tuition and other approved expenses, such as transportation or curriculum costs. The money would be deposited in a family savings account, to be withdrawn using a debit card. It would be up to the education department to do audits to make sure the money goes to qualified expenses.
Previous iterations had included more areas and more students, including families who homeschool. It also had tougher testing requirements. The ultimate version only requires participating students to complete state standardized testing in math and English language arts, but not science and social studies.
Families interested in participating must provide federal income tax returns or provide proof they can qualify for federal assistance. And despite some wording changes, the American Civil Liberties Union of Tennessee and the Tennessee Immigrant and Refugee Rights Coalition said the bill would exclude families who are in the U.S. illegally from getting their children vouchers, which has raised legal concerns.
As of Friday, however, no organization had threatened to file a lawsuit — though school districts in the Nashville metro area and Shelby County had vowed to "pursue all legal remedies" to ensure the bill did not violate the Tennessee Constitution's equal protection provisions for public schools.
Currently, schools get a certain amount of funding based on student enrollment. The concern had been that under the education savings account program, students who leave public school districts would take that funding with them. A last-minute compromise would allow participating public schools to continue to be fully reimbursed for losing students, but there is still room for lawmakers to reject the reimbursements in future legislative sessions.
Lawmakers say they will budget $25 million a year to fund the program starting in 2021. Supporters have said, however, they don't expect 15,000 students to participate, and any leftover funds will be funneled to a separate account to fund grants for certain non-participating schools.
Nationally, five states have passed laws allowing some sort of education savings accounts: Arizona, Florida, Mississippi, Tennessee and Nevada. The Nevada Supreme Court later ruled the state could not use school dollars to fund the accounts.