Surrounded by school choice advocates and private school students, Iowa Gov. Kim Reynolds on Tuesday signed sweeping legislation supporting private schooling.
The bill is the culmination of a three-year effort and marks an early victory in the governor’s top legislative priorities in session.
All public school students and thousands of private school students are now eligible for a $7,600 Education Savings Account to pay for tuition and other expenses at a private school. The program is expected to cost $107 million in its first year. Through fiscal 2027, the money is open to all students in public and private schools, regardless of income, and is expected to cost $345 million.
It was the first bill of the legislature to be signed to bring to Reynolds’ desk after a flurry of activity in the first two weeks.
“For the first time, we’re funding students instead of a system,” Reynolds said. “We reject the idea that the answer to improving education is simply putting more money into the same system.”
Opponents of the law say it will drain money from public schools, fund unaccountable private institutions and argue that private schools can turn away students with disabilities or families whose values don’t match theirs.
In hours of debate Monday night, Democrats shared stories of students with disabilities being turned away from private schools and said much of the money would go to wealthy families who already pay for private schools.
The bill passed both the House of Representatives and the Senate Monday night and early Tuesday morning. It passed 55-45 in the House of Representatives, where all Democrats and nine Republicans voted against. In the Senate it passed 31-18. Three Republicans voted against, along with all Democrats present. Democratic Senator Tony Bisignano of Des Moines was not present.
“The law will withdraw essential funds from 92 percent of our student body and send the funds only to a select group of students admitted to private schools,” said Mike Beranek, president of the Iowa State Education Association, in a statement. “Tonight, some lawmakers ignored the wishes of most Iowans and voted to spend taxpayers’ money on private interests.”
Reynolds said the program is not at odds with public schools. Acknowledging that the vast majority of students are expected to remain in public schools, she said the bill will give school districts more freedom in how they use their state funds.
“Public schools are the foundation of our education system,” Reynolds said. “And for most families, they will continue to be the option of choice. But they are not the only choice. And for some families, another path may be better for their children.”
Public school districts receive approximately $1,200 for each student resident in that district who is enrolled in a private school. The law also allows schools to use unspent categorical funds earmarked for other purposes to increase teachers’ salaries. Proponents say the change will give public schools more flexibility in how state dollars are used.
“I’ve been trying to figure out how we can give them flexibility … especially in rural Iowa, to increase salaries so we can be competitive?” Reynolds told reporters after signing the bill. “What we saw when we looked at this was over $100 million in unspent funds.”
Followers celebrate passage
Trish Wilger, executive director of the Iowa Alliance for Choice in Education, said she’s thrilled the law will be signed into law. Before the start of the legislative period, Wilger’s organization campaigned for a universal education savings account system.
“We’ve worked on this for so long and so hard that it doesn’t seem quite real yet, but I’m just excited about the opportunities it will bring to families in Iowa,” she said.
The law will provide a choice for parents who want to send their children to non-public schools but don’t have the financial means to do so, Wilger said, as well as parents with children in private schools who can’t afford it.
Wilger acknowledged that some high-income families could apply for the money, but she said it reflects the public school system, where students receive the same benefits regardless of income.
“We believe this is a similar scenario where funding follows the student and not goes to the institution,” she said.
Dan Zylstra, the principal of Pella Christian Schools, argued that the law will have no negative impact on rural schools. He was superintendent at an Indiana public school that has a more limited scholarship program for private schools, and he said the program did not harm public schools.
“School choice hasn’t decimated my rural public school district,” he said. “A few students drove 30 miles to the nearest Christian school … but the vast majority of students and families loved our school and stayed in it.”
But not everyone in the Capitol supported Tuesday morning. During Reynolds’ remarks in the rotunda, Senator Claire Celsi, a West Des Moines Democrat, shouted “nobody wants coupons” and “rural Iowa doesn’t want coupons” from the second floor of the Capitol.
Reynolds said the state will issue a solicitation Tuesday for proposals for a third-party company to manage the state program. Parents can sign up for updates on a new government website that will go live Tuesday.
Similar to Iowa’s “529” College Savings Iowa Plan, the Treasury accounts are created under the control of the Iowa Department of Education and administered by a third party.
The company that manages Arizona’s program, ClassWallet, has been criticized for lax oversight. A 2018 audit of the program found that $700,000 was spent on unauthorized expenses.
“We will continue to ensure that we have accountability and oversight as we work on the RFP,” Reynolds told reporters. “We want to make sure we have transparency and accountability.”