Gov. Reynolds’ ESA program, fast-tracked through the Iowa Legislature, goes into effect May 31

Jordan Sellergran/Little Village

Gov. Kim Reynolds’ office announced on Thursday morning that the new “Students First Education Savings Accounts” program will begin accepting applications on May 31. In the same statement, the governor’s office unveiled the administrative rules for the voucher-style program and other information.

Passing a law to create a program to divert money from public to private schools was Reynolds’ top legislative priority this year, after failing to get such a law passed in previous legislative sessions. After last year’s failure, the governor took the unprecedented step of targeting for defeat in the 2022 primaries members of her own Republican Party running reelection who opposed channeling taxpayer dollars to private schools — schools that don’t have to meet the same standards as public schools, especially since much of state’s population doesn’t live near a private school.

Proponents of Education Savings Accounts (ESAs) like to distinguish them from older versions of school vouchers, which involved the state directly sending money to a private school selected by parents participating in the program. In an ESA, there is an intermediary step, where funds pass through an account created in a student’s name, before being sent to a private school. The extra step allows ESAs to get around prohibitions some states have on providing state education funds to religious schools.

Reynolds’ ESA bill was fast-tracked through the Iowa Legislature at the beginning of this session by the large Republican majorities in both the House and the Senate. According to the governor’s own estimates, the program will cost approximately $901 million during its first four years. That figure does not include the cost of paying a company to administer the program.

During an interview in January while the ESA bill was still pending in the legislature, KCCI’s chief political reporter Amanda Rooker asked Reynolds about the cost of administering the program.

“I don’t know yet what that is,” the governor replied. “But we need, you know, that’s a component that we need and so that’s some of that stuff we’ll, you know, we’ll be able to give you that information once we go through the RFP [request for proposal] process.”

On Feb. 26, Reynolds announced she had awarded the contract to administer the ESA program to Odyssey, a New York-based company that administers the transfer of tax dollars for ESA programs in Arizona and Idaho. The governor did not say how much the company would be paid for its services, but in its application, Odyssey estimated it will cost $629,550 per year to administer the program.

No information on what Odyssey is being paid was included in the statement on Thursday.

During the January interview, Rooker also asked the governor about accountability and transparency standards for the ESA program. Reynolds had said the program would have high standards, but hadn’t worked out what they were yet. Rooker asked if those standards were “something that lawmakers will see before they vote yes or no on a bill?”

“No,” the governor replied. She said the standards would be worked out after a company to administer the program was selected.

The lack of information about administrative costs, and accountability and transparency standards, did nothing to slow the advance of the ESA bill. Gov. Reynolds signed the bill into law on Jan. 24.