Image Credit: Tennessee General Assembly
The Tennessee Conservative [By Adelia Kirchner] –
Gov. Bill Lee’s (R-TN) “Education Freedom Scholarship Act” passed by an 8-3 vote in the Senate Finance, Ways and Means Committee with only one Republican lawmaker voting against the legislation.
Senators Ferrell Haile, Joey Hensley, Jack Johnson, Bill Powers, Paul Rose, John Stevens, Bo Watson, and Ken Yager voted to send SB6001 to the Senate floor for a final vote.
Republican Sen. Page Walley (R- Savannah-District 26), along with Democrat Senators London Lamar and Jeff Yarbro voted against the bill.
During the Wednesday meeting, Sen. Jack Johnson (R-Franklin-District 27) who is carrying the legislation described the three main things the bill does.
First, this bill establishes a facilities fund to provide grants to local school districts.
As titled in the fiscal note for SB6001, the LEA School Building Fund would be established by redirecting 80% of the dollars generated by Tennessee’s sports wagering and privilege tax.
Money in this fund would be distributed as follows:
Priority 1: $25 per student for LEAs located in an economically distressed county, high-performing districts, or fast-growing districts.
Priority 2: 15% of remaining funds would go to LEAs that have suffered significant damage due to a natural disaster.
Priority 3: Disbursement of funds to LEAs that demonstrate other construction or maintenance needs.
“It is intended for this to be a recurring appropriation to this fund, from the Sports Wagering Council, to help our local districts with capital [construction] and maintenance expenses,” said Sen. Johnson.
When SB6001 was amended by the Senate Education Committee on Tuesday, certain stipulations were added regarding the 80% of gaming money going towards this fund, in order to protect the state’s Education Lottery.
This year, 80% of the generated sports wagering money in Tennessee was about $77 million.
As introduced, this bill dictated that all $77 million be redirected to the LEA School Building Fund.
However, under the recent amendment, that $77 million will not be touched until any deficiencies in the Education Lottery have been addressed.
“Of that 80%, you can’t touch that money for capital until we address any deficiency that the lottery might have. The lottery is projected to have a deficiency this year,” explained Sen. Bo Watson (R-Hixson-District 11). “We’re taking $14 million of that [$77 million] for the lottery, which leaves us a balance of $63 million. That $63 million is now available for use for the capital grant.”
The amount of money available for capital grants to local school districts could fluctuate quite a bit in the years to come.
“So potentially in the future, if the lottery loses money, then this fund might go to zero,” said Sen. Hensley.
“In a very worst-case scenario, that would be accurate yes,” responded Sen. Watson.
Second, this bill provides for a one-time bonus of $2,000 per public school teacher.
According to Sen. Johnson, there are 86,000 eligible recipients of this bonus.
Factoring in employment taxes, the total one-time expense for this part of the legislation totals out to $198,367,600.
The third and perhaps most obvious thing this bill does, is create Education Freedom Scholarships.
Schools eligible to accept these “scholarships” or vouchers, would be Tennessee private schools that qualify as Category I, II, or III private schools.
In the first year of the program, the 2025-2026 school year, there will be 20,000 scholarships available in the amount of $7,296 per student.
The first 10,000 scholarships will go to students whose household income does not exceed 300% of the amount required for the student to qualify for free or reduced lunches (i.e. students whose annual household income does not exceed $173,000 annually for a family of four).
The remaining 10,000 will be “universal” meaning they will be awarded to students regardless of financial status.
After the first year of the program, the idea is that all available scholarships will be awarded regardless of family income.
The estimated first year cost of the scholarships is $148,620,000 (Scholarships = $145,920,000 + Administrative Costs = $2.7 million).
This bill also includes a $5 million funding floor for public schools.
“Obviously one of the concerns we’ve heard from our local folks is a potential loss of students, disenrollment that could result in a loss of revenue to our local districts,” said Sen. Johnson. “We have addressed that concern with a funding floor provision that is in the bill, and no district will receive less than they received in the prior school year. Even if there is a net loss due to disenrollment.”
The projected expense of that funding floor, essentially a back-up fund for public schools, is currently $3,328,000 which Sen. Johnson said “is certainly provided for in the budget.”
“I think 90 of our 95 counties are growing,” he noted. “We don’t anticipate the funding floor to generate any significant loss in any particular district, but we want to be prepared for it and make sure that we honor that commitment to make sure that districts do not lose money due to disenrollment.”
SB6001 is scheduled for consideration on the Senate Floor on Thursday, January 30th, 2025.
About the Author: Adelia Kirchner is a Tennessee resident and reporter for the Tennessee Conservative. Currently the host of Subtle Rampage Podcast, she has also worked for the South Dakota State Legislature and interned for Senator Bill Hagerty’s Office in Nashville, Tennessee. Adelia is The Tennessee Conservative’s on-site reporter for the Tennessee General Assembly. You can reach Adelia at adelia@tennesseeconservativenews.com.
