Missouri school choice advocates secured a significant win yesterday with the final passage of HB 349 (Christofanelli), creating the state's first education savings account (ESA) program.
The bill creates the "Missouri Empowerment Scholarship Accounts Program" and provides a 50% tax credit for donors who contribute to a qualifying educational assistance organization.
The program caps the tax credits awarded in any one calendar year at $50 million. That means there would be a maximum of approximately $100 million available for student scholarships.
The bill contains a rural carve-out where the provisions only apply to counties with a charter form of government OR any city with a population of at least 30,000.
Transportation funding must equal or exceed 40% of the projected amount necessary to fund public transportation state aid fully for HB 349 to take effect. According to budget estimates provided by the Department of Elementary and Secondary Education, "Full transportation state aid funding for fiscal year 2021 is projected to require $315 million." In the fiscal note for HB 349, DESE reported that $278.9 million would be needed to fully fund transportation. The final $113.9 million that was appropriated for FY22 will exceed the 40% threshold.
The bill establishes qualifying tiers for the scholarships (equal to the state adequacy target of approximately $6,300 per student) as follows:
- students with "individualized education plans" OR students who qualify for free- and reduced lunch
- students who live in households whose total income does not exceed 200% of the free- and reduced-lunch income standard
- all other students
Families from the following counties and cities would be eligible for a scholarship account:
- Clay County
- Jackson County
- Jefferson County
- St. Charles County
- St. Louis County
- St. Joseph
- St. Louis City
- Jefferson City
- Cape Girardeau
Back of the napkin estimates suggest there are approximately 68,000 students with IEPs in the qualifying counties and cities and about 236,000 students who qualify for free- and reduced lunch in the qualifying cities and counties.
If the ESA program receives $100 million in donations, that will provide scholarship funds for close to 16,000 students.
According to EdChoice, as of 2021, there are 29,336 students across the country using Education Savings Accounts (ESAs). There are active ESA programs in five states (Arizona, Florida, Mississippi, North Carolina, and Tennessee. Nevada's program, which would cover 95% of its student population, is embroiled in litigation.