Senate committee advances ESA bill at a cost to taxpayers of $1 billion

(The Center Square) –The Texas Senate Committee on Education K-16 has advanced a school choice bill filed by state Sen. Brandon Creighton, R-Conroe.

SB 2, the Texas Education Freedom Act, passed the committee by a 9-2 vote and is expected to pass the full Senate. Creighton authored a similar bill in 2023 that passed the Senate and failed in the House.

This year, under Republican House Speaker Dustin Burrows, the House’s proposed budget is nearly identical to the Senate budget, allocating $1 billion to fund the ESA program, The Center Square reported.

SB 2 would create Texas’ first Education Savings Account pilot program designed to serve roughly 100,000 students, prioritizing low-income and special needs students.

Every Texas student either entering school for the first time or currently enrolled in public school, private school or homeschooled may apply. Funding is allocated for 100,000 students. The majority of slots, 80%, will be filled by lottery among those who previously attended public school, are from low-income households or have a disability. The remaining slots will be filled by lottery among all other applicants.

The bill would create a process to oversee and administer the program through the state comptroller’s office and put in place cybersecurity requirements to address fraud concerns. The comptroller’s office would be required to verify participating entities, including accreditation, educational service providers and vendors, authorize expenses, and disburse payments.

The bill includes state reporting and auditing requirements and stipulates that ESA payments aren’t taxable income for participating parents.

Approved ESA expenses include tuition and fees for private school, higher education providers, purchasing textbooks and other instructional materials; fees for public schools and open-enrollment charter schools; costs related to academic assessments and tutoring; and educational therapies not covered by welfare programs like Medicaid, the Children’s Health Insurance Program or private insurance, according to the bill language.

Notably, it includes no prohibitions related to immigration or citizenship status, indicating that illegal foreign national children enrolled in public schools would be eligible to apply.

The bill allocates $10,000 per student per year; $11,500 for students with disabilities; $2,000 for homeschool students.

The bill is double the cost of the one Creighton filed in 2023, which allocated $500 million to fund $8,000 ESAs for roughly 62,500 students, The Center Square reported.

According to the fiscal note from the Legislative Budget Board, the five-year impact for the ESA program is projected to cost taxpayers:

$6.9 million in fiscal 2026;$1 billion in fiscal 2027;$2.98 billion in fiscal 2028;$3.28 billion in fiscal 2029;$3.751 billion in fiscal 2030.

The projected cost is based on several factors, according to the analysis. The Texas Education Agency projects that 10% of students leaving public schools and homeschooling to use ESAs to attend private schools would be special education students. It also projects that the majority of available private school slots would be filled by public school students (70%) and homeschool students (30%).

The analysis assumes 24,500 students would leave public schools for private schools and 10,500 home school students would enroll in private school in fiscal 2027.

By fiscal 2030, that number will have increased to 98,000 leaving public schools for private schools and 42,000 homeschool students enrolling in private school.

The analysis assumes 50% of home school students would apply to participate in the program in the first year, increasing 5% each subsequent year, at a cost of $2,000 per student.

Of the state’s 560,000 home school students, the analysis assumes that 269,500 would receive $2,000 ESA funds in fiscal 2027, increasing to 322,000 who would in fiscal 2030.

Creighton says the bill provides “universal, comprehensive school choice … ensuring every Texas family has access to the educational opportunities they deserve.” If enacted, ESAs provided to 100,000 students, he said, will “break the barriers imposed by zip codes,” “give all families the tools they need to provide a brighter future for their children” and “deliver for the 6 million students in Texas schools.”