Republican Iowa Gov. Kim Reynolds signed the “Students First Act” on Tuesday, which creates tax-funded Education Savings Accounts (ESAs) that eventually will become available for all K-12 students across the state with no income limits.
“What a great day for our children!” Reynolds exclaimed to a crowd that included children, parents, lawmakers, and supporters of the measure gathered at the Iowa Capitol rotunda, the Des Moines Register reported.
The bill, HF 68, sets aside the current amount of money that the state pays per Iowa public school student, which includes more than 481,000 K-12 children, according to the latest Iowa Department of Education data. Then the money is deposited into individual ESAs to be used toward “defined qualified educational expenses,” explains the bill’s fiscal note, prepared by the Legislative Services Agency.
That amount was $7,598 in fiscal year (FY) 2023, according to the fiscal note. In following years, the annual amount deposited into the ESAs will be based on the state’s percent of growth and state cost per pupil (SCPP). For example, the fiscal note projects that in 2024 and 2025, the amount will be $7,598 and $7,788, respectively, assuming a 2.5 percent state percent growth.
Beginning in FY 2024, students who will be eligible for the ESAs are those who were enrolled in public school the previous year, those who were enrolled in a nonpublic school the previous year with an annual income at or below 300 percent of the federal poverty level (or $83,250 for a family of four), and those entering kindergarten.
The following year in FY 2025, the number of eligible students will expand to those enrolled in a nonpublic school with a household income at or below 400 percent of the federal poverty level (or $110,000 for a family of four).
The third year will include all student-aged children enrolled in either a public or nonpublic school.
The fiscal note estimates that in the first year of the program, 14,068 children will receive ESAs, costing the state nearly $107 million. By FY 2026, when the state fully phases in the program, that cost will reach $345 million with about 20,000 children enrolled.
“For the first time, we will fund students instead of a system,” Reynolds said in a statement after the legislature approved the bill, KIMT3 reported. “Parents, not the government, can now choose the education setting best suited to their child regardless of their income or zip code. With this bill, Iowa has affirmed that educational freedom belongs to all, not just those who can afford it.”
Creating ESAs Was Reynolds’s ‘First Priority’
During the “Condition of the State Address” on Jan. 10, Reynolds said her “first priority” for the upcoming legislative session was “making sure that every child is provided with a quality education that fits their needs” through her bill to create education savings accounts “for families who choose to send their child to a private school.”
On Jan. 24, Iowa joined several other states that have already passed similar legislation. According to edchoice.com, 29 voucher programs exist in 16 states, Washington, D.C., and Puerto Rico. And eight states have ESAs for their K-12-aged student population.
The bill’s passage marks the third time that Iowa attempted to put into law “taxpayer-funded scholarships for private school,” local ABC 6 News reported. And according to Fox News, it’s the third state nationwide to pass “a school choice measure that extends to every student” in its state.