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Tennessee Passes Education Savings Account Legislation

May 28, 2019
By Juliana Knot

The Tennessee General Assembly passed legislation establishing an education savings account program supported by Gov. Bill Lee.

The Tennessee General Assembly passed legislation establishing an education savings account program supported by Gov. Bill Lee.

Low-income Tennessee parents with children in low-performing government schools will be able to use state-funded ESAs to transfer them to a school of their choice if, as expected, Lee signs the bill into law. Eligibility is limited to Memphis- and Nashville-area public school students and children enrolled in Achievement School District schools.

The ASD, a component of the Tennessee Department of Education, runs schools across the state in the bottom 5 percent of student performance on standardized tests. It manages the schools directly or through charter management organizations, with the goal of turning around their performance.

To be eligible, the student’s family must meet the income qualifications for Temporary Assistance to Needy Families (TANF), the federal cash welfare program.

ESA Enrollment Capped

Each ESA will allot about $7,300 per year for the student, allowing children to attend private schools that meet Tennessee Department of Education standards or for other education-related expenses.

The ESA program will be implemented for the 2021-2022 school year, with initial participation capped at 7,500 students. Each subsequent year, 7,500 additional students will be added until the program reaches 30,000 participants. At that point, a lottery system will be put into place. The ESA program is expected to spend $125 million in the first three years out of state funds.

The legislation allocates $25 million in additional state funding for the government schools the ESA students leave.

‘Greater School Choice’

The ESA program was given final approval by the General Assembly on May 1 thanks to the support of the governor, says Sen. Dolores Gresham (R-Somerville), chair of the Senate Education Committee.

“The [ESA] bill ... is a result of the bold leadership of our governor, Bill Lee, who believes, as I do, that parents ought to have greater school choice,” Gresham told Budget & Tax News. “We cannot have any of Tennessee's children languishing in chronically low-performing schools.”

The legislation “gives the children of Tennessee opportunities at a better education, particularly those low-income students in failing schools,” stated Lee in an April 26 video as the bill advanced toward final passage.

‘More Competition’

The ESA program will benefit students who remain in government schools as well as those who transfer to private schools, says Justin Owen, CEO of the Beacon Center of Tennessee.

“Even those children remaining in public schools will benefit from this program, as this will create more competition and encourage poor-performing schools to rise to the occasion,” said Owen.

 “The children trapped in poor-performing schools win from the passage of the bill, as well as their parents, who will now have more options instead of a one-size-fits-all approach to education,” said Owen.

Testified to Choice Benefits

Experience with school choice programs around the country has confirmed their benefits, said Lennie Jarrett, project manager for the Center for Transforming Education at The Heartland Institute, in testimony before the Tennessee Education Committee.

“These programs improve access to schools that deliver quality education inexpensively,” Jarratt told the committee. “Additionally, these programs benefit public school students and taxpayers by increasing competition, decreasing segregation, and improving civic values.”

School choice programs are especially popular among minorities and low-income families, testified Jarratt, citing an American Federation for Children survey of Tennessee voters conducted in February 2019.

“Seventy-nine percent of African-American parents [in Tennessee] with incomes lower than $40,000 per year support ESA programs,” Jarratt said. “Similarly, 70 percent of Hispanics with incomes below $40,000 said they support ESAs.”

Lawmakers should make ESAs universally available to all families in the Volunteer State so every child can receive the best education possible, Jarratt told the committee.

“Public schools should not hold a monopoly on education, because they simply cannot serve the individual educational needs of all children,” Jarratt said.

Juliana Knot (jjknot322@gmail.com) writes from Grand Rapids, Michigan.

Official Connections: 

Tennessee Gov. Bill Lee: https://www.tn.gov/governor/

Tennessee state Sen. Dolores R. Gresham (R-Somerville): http://www.capitol.tn.gov/senate/members/s26.html

Internet Info:

Lennie Jarratt, “Testimony Before the Tennessee Senate Education Committee on the Tennessee Education Savings Accounts Act,” The Heartland Institute, April 10, 2019: https://www.heartland.org/publications-resources/publications/testimony-before-the-tennessee-senate-education-committee-on-the-tennessee-education-savings-accounts-act

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