Reimagining Education

ESA bill a major victory for Missouri families

In a stunning and decisive vote the Missouri Senate handed a major victory to Missouri families this week.

On Thursday, the Missouri Senate voted 20-13 to approve HB 349 which will create Missouri’s first ever Empowerment Scholarship Account program and give Missouri families access to funding to ensure their children get an education tailor made to their individual needs.

CEAM’s Executive Director Laura Slay heralded the groundbreaking vote, saying it was a victory Missouri families had been fighting for for decades.

“Today is a historic day for children in Missouri thanks to the brave and forward-thinking members of the Missouri Senate,” she said. “CEAM is grateful to the thousands of volunteer advocates from all walks of life from rural, urban, and suburban areas, who have given their time and energy to pass this bill. After more than a decade of students, parents, and teachers pleading for the right to choose an education that a family sees as the best fit for their child, today we have taken a giant step forward. 

“Because of the bold actions taken by the Missouri Senate today and the House a few weeks ago, more students will succeed and thrive in their education and their lives,” she added. “This is also a major win for all of Missouri as it keeps our state at the forefront of educational options and will help us to compete with neighboring states for economic development initiatives and help Missouri attract the growing segment of work-from-home families created by the pandemic.”

What happens now?

Thursday’s vote means that Missouri’s first ESA program has cleared the state legislature, and is now in the hands of Governor Mike Parson. Gov. Parson can either sign the bill, which he is expected to do, let it go into law without a signature, or veto the legislation.

If Gov. Parson signs the bill or lets it become law without a signature, HB349 would go into effect until Aug. 28, 2021, but because its funding is based on donations, it is unlikely that scholarships would be available to Missouri students before 2022.

How the new ESA program will help Missouri students

Under the new legislation, eligible K-12 students would be able to apply for scholarship of up to $6,375 per year that could be used to:

  • Tuition or fees at a public charter or district school or at a private school
  • Textbooks required by a qualified school
  • Educational therapies or services from a licensed or accredited practitioner
  • Tutoring services
  • Curriculum for homeschooling
  • Tuition or fees for a private virtual school
  • Fees for testing
  • Services provided by a public school 
  • Computer hardware 
  • Fees for summer education programs and specialized after-school education
  • Transportation costs for mileage to and from a qualified school

Who qualifies for a scholarship?

HB349 is designed to help the students most in need of better educational options and as a result gives priority to those students. In order to qualify for an ESA scholarship a student must:

  • Live in a county with a charter form of government or a city with a population of at least 30,000
  • Have attended a public school for at least a semester in the past year before applying for a scholarship or be entering Kindergarten
  • Either have an “individualized education plan” (IEP) or live in a household with an income that does not exceed 200% of the income level required to qualify for free and reduced-price lunches.

The law requires scholarships to be distributed first to students with IEPs or from households with incomes that do not exceed 100% of the income required to qualify for free or reduced-price lunches, then to students from households with income that does not exceed 200% of the income required to qualify for free or reduced-price lunches, and then to any other qualifying student.

How HB349 helps district schools

Two provisions of the bill are designed to ensure that the new program does not have a negative impact on traditional district schools.

The first, a major win for rural schools, requires the state to fund school transportation reimbursements to districts at at least a 40% of what it is supposed to in order for the ESA program to go into effect. In recent years, the state has only reimbursed districts at levels of 10-15% of what it is supposed to, so this provision will result in millions of dollars of new funding flowing to school districts across the state.

The second provision, a hold-harmless clause, ensures that districts do not lose funding for any students who receive scholarships. Under this provision, for the first five years of the program, any district that loses a student who is using an ESA to attend another school will still receive full state funding for the student for five years after the student unenrolls from the district.

How the new ESA program is funded

The entire Empowerment Scholarship Account program will be funded through individual and business donations.

In return for their donation, supporters of the program will receive a state tax-credit equal to 100 percent of their donation. Donors can receive tax-credits up to 50 percent of their total tax liability.

Accountability in the ESA program

Legislators made sure to include a number of accountability measures in HB349 to ensure that funds are being spent properly for educational needs and that families are happy with the education their children are receiving through the program. These accountability measures include:

  • Students in the program will be required to take either the state achievement tests or nationally norm-referenced tests each year and the results will be reported to both the parents and the state Treasure’s Office (who will report aggregated data to the state legislature).
  • Families will take annual parent satisfaction surveys focused on both student achievement and student safety and those results will be shared with the state treasurer and legislature.
  • The state treasurer will be required to publish graduation rates for students participating in the program.
  • The state treasurer will also conduct annual and random audits of scholarship accounts to ensure funds are being spent on the qualified educational expenses

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