Gov. Bill Lee surprised many in his own party last summer when he ordered an early launch for Tennessee’s controversial education voucher program.
Now voucher opponents say that the expedited start — and little funding to pay for it — could become the basis for a lawsuit to unravel the Republican governor’s 2019 education savings account law.
Democratic lawmakers raised new questions Monday about the law’s constitutionality over a provision that renders a state law null and void if it requires new state funds but isn’t accompanied by a big enough allocation to cover first-year costs.
When the voucher bill was approved last year amid fierce debate, lawmakers were told that the program would cost about $771,000 this year. But the education department already has entered into a two-year contract for $2.5 million with a Florida-based vendor, ClassWallet, to manage online payments and applications. It’s also struggled to cover the cost of staffing necessary to build the program earlier than expected.
“It’s becoming very apparent that the governor and his people are making this up as they go,” said Rep. Bo Mitchell, a Nashville Democrat who has filed his own bill to rescind the law.
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A legislative review of new voucher rules gave Mitchell and other Democrats an opportunity to grill state education officials for 90 minutes on Monday about details for the program’s start.
Among the revelations: The department did not go through a competitive bidding process or the legislature’s fiscal review committee to secure its contract with ClassWallet.
The department also has not sought a definitive ruling from the Internal Revenue Service over whether public money placed in an education savings account could be taxable for families receiving it.
Is money in Tennessee’s education savings accounts taxable? Nobody’s sure.
The joint Government Operations Committee ultimately gave the rules a positive recommendation. The 15-4 vote — which was cast along party lines — puts the program on track to give taxpayer money to up to 5,000 families to pay for private school tuition beginning this fall.
“I know people are grasping now trying to stop this,” said Rep. Bill Dunn, a Knoxville Republican who co-sponsored the bill. He charged that opponents are “trying to keep kids from having the opportunity that others have.”
The meeting gave voucher opponents a chance to pick apart the challenges created by Lee’s decision to roll out the voucher program a year earlier than required by law.
Pressed by Rep. G.A. Hardaway of Memphis about how the state is paying for its ClassWallet contract, Deputy Commissioner Amity Schuyler said the department has moved over some funding from a defunct merit-based teacher pay program that began in the 1980s under Gov. Lamar Alexander’s administration.
Asked Monday about the funding questions, a spokesman for the governor declined to comment.
Lee’s administration worked closely with the state attorney general’s office on the governor’s voucher proposal and subsequent rules that will govern everything from how families can apply to requirements for participating schools. Those rules sailed through the state Board of Education last fall with little discussion.
Several organizations opposing vouchers have been exploring ways to take the state to court. And Shelby County Schools in Memphis and Metropolitan Nashville Public Schools also are considering legal action, since those are the only communities affected by the law.
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