Tag: education savings account

Nevada Supreme Court: Education Savings Accounts Are Constitutional, Funding Mechanism Isn’t

In a landmark decision, the Supreme Court of Nevada today upheld the constitutionality of the nation’s most expansive educational choice law. However, the court ruled that the funding mechanism the legislature adopted is unconstitutional. If the legislature creates a new funding mechanism–as it could and should in a special session–then the ESA program could be implemented right away.

Enacted in 2015, Nevada’s education savings account (ESA) policy was originally scheduled to launch at the beginning of this year, but it immediately drew two separate legal challenges from the government schooling establishment and the ACLU and its allies. Nevada’s ESA provides students with $5,100 per year (plus an additional $600 for low-income students or students with special needs) to use for a wide variety of approved educational expenditures, including private school tuition, tutoring, text books, online courses, homeschool curricula, and more. Families can also roll over unspent funds from year to year. As the Heritage Foundation’s Lindsey Burke and I have explained, the ability to customize a child’s education and save funds for later are significant improvements over school vouchers:

ESAs offer several key advantages over traditional school-choice programs. Because families can spend ESA funds at multiple providers and can save unspent funds for later, ESAs incentivize families to economize and maximize the value of each dollar spent, in a manner similar to the way they would spend their own money. ESAs also create incentives for education providers to unbundle services and products to better meet students’ individual learning needs. 

Of the five existing ESA programs, Nevada’s is the most expansive. Florida, Mississippi, and Tennessee restrict their ESAs to students with special needs. Arizona originally restricted ESA eligibility to students with special needs, but has since included foster children, children of active-duty military personnel, students assigned to district schools rated D or F, and children living in Native American reservations. In Nevada, all students who attended a public school for at least 100 days in the previous academic year are eligible. 

In two separate lawsuits, opponents of educational choice alleged that Nevada’s ESA violated the state constitution’s mandate that the state provide a “uniform system of common schools” (Article 11, Section 2), its prohibition against using public funds for sectarian purposes (Article 11, Section 6), and a clause requiring the state to appropriate funds to operate the district schools before any other appropriation is enacted for the biennium (Article 11, Section 10). The court found that the ESA was constitutional under the first two constitutional provisions, but the way it was funded violated the third.

Nevada Supreme Court Hears Education Savings Accounts Lawsuits

Today, on Milton Friedman Legacy Day, the Nevada Supreme Court will hear oral arguments in two lawsuits against the state’s education savings account (ESA) law. Under the law, students who leave their assigned district school can receive a portion of the funds that would have been allocated to them in their district school (about $5,100 to $5,700 depending on family income). The parents can use those funds to customize their child’s education by purchasing a wide variety of educational good and services, including private school tuition, text books, online courses, homeschool curricula, and more. They can even save funds for future expenditures. A similar program in Arizona has proved highly popular among parents.

However, a group dedicated to protecting the district school monopoly is asking the state supreme court to strike down the program before it goes into effect:

“I fear that, because this is the most aggressive model for this program, the privatization of education … will spread like wildfire,” said Electra McGrath-Skrzydlewski, whose 12-year-old daughter is a student in the Clark County School District.

McGrath-Skrzydlewski joined several parents last October to sue the state in a Carson City court, challenging SB302 on the grounds that it diverts money meant “exclusively” for public schools to private schools and other private expenses. Their complaint also claims the bill violates a constitutional requirement that lawmakers create a “uniform” system of public schools.

As Neal McCluskey noted on Twitter, even the opponents of the ESA assume that parents want it. And they’re right: more than 8,000 eager families have already applied.

David Boaz on educational choice

In separate case, the ACLU claims that the ESA law violates the state constitition’s “uniformity” clause as well as a separate constitutional provision prohibiting the state funding of religious instititions. However, as I’ve discussed previously, these arguments do not hold water. The ACLU wants the court to interpret the constitutional mandate that the state create a system of “uniform” and nonsectarian schools to mean that it must exclusively fund those schools. Fortunately, the lower court rejected this strained interpretation, holding instead that “the Nevada constitution requires the state to establish a non-sectarian system of public schools, but it is also empowered to encourage education by other means that are not limited to non-sectarian schooling.”

Likewise, the lower court rejected the ACLU’s Blaine Amendment claim, holding that it “was not intended to preclude any expenditure that has an incidental benefit to religion, where such is made for a primary secular purpose,” and that the ESA “was enacted for the valid secular purpose of providing financial assistance to parents to take advantage of educational options available to Nevada children.”

For more information on the two cases and to watch live feed of the oral arguments beginning at 1:00pm EDT, go to Choice Media’s website.

Nevada Judge: Education Savings Accounts Are Constitutional

Dismissing a challenge from the ACLU, yesterday Las Vegas District Court Judge Eric Johnson ruled that Nevada’s education savings account (ESA) program is constitutional. However, the ESA program is still on hold due to a second lawsuit against the ESA program in which the judge issued an injunction against issuing the accounts. That case is currently pending before the Nevada Supreme Court, and it is possible that the two legal challenges will be merged.

The ACLU challenged the ESA law on two grounds, claiming that the ESA violated the Nevada Constitution’s “uniformity” clause and the state’s historically anti-Catholic Blaine Amendment. Siding with the state of Nevada and the Institute for Justice, the court rejected these claims. 

“Uniform” Does Not Mean “Exclusive”

Nevada’s state constitution requires that the legislature “shall provide for a uniform system of common schools.” These schools must “be established and maintained in each school district at least six months in every year” and it is forbidden for these schools to “allow instruction of a sectarian character therein.” In a separate clause, the state constitution enjoins the legislature to “encourage” education “by all suitable means.”

The ACLU argued the “suitable means” mentioned in Article XI, Section 1 are defined by uniformity clause in Section 2. The ACLU cited the infamous Bush v. Holmes decision in Florida, in which Florida’s state supreme court struck down the state’s voucher program by interpreting the state’s duty to create a “uniform” system of public schools to mean that the state had a duty to provide a system of schooling exclusively according to the means described in the state constitution, despite the state constitution empowering the legislation to create “other public education programs that the needs of the people may require.” (The Florida Education Association is now suing to halt the state’s tax-credit scholarship program on the same grounds.)

However,  the judge rejected this interpretation, holding instead that that in these two clauses, “the framers indicated that they intended to create two duties, a broad one to encourage education by ‘all suitable means,’ and a specific, but separate, one to create a uniform public school system.” The judge noted that the framers’ “use of two different sections to set out the Legislature’s responsibilities without reference in either section to the other plainly suggests the sections are separate and distinct.” By contrast, adopting the ACLU’s clever but strained interpretation would, according to the judge, “make section 1 superfluous, without any meaning or purpose.”

In other words, the Nevada constitution requires the state to establish a non-sectarian system of public schools, but it is also empowered to encourage education by other means that are not limited to non-sectarian schooling. 

Nevada Enacts First Nearly Universal Education Savings Account

On Tuesday, Nevada Gov. Brian Sandoval signed into law the nation’s fifth education savings account (ESA) program, and the first to offer ESAs to all students who previously attended a public school. Earlier this year, Sandoval signed the state’s first educational choice law, a very limited scholarship tax credit. Despite their limitations, both programs greatly expand educational freedom, and will serve as much-needed pressure-release valves for the state’s overcrowding challenge.

When Nevada parents remove their child from her assigned district school, the state takes 90 percent of the statewide average basic support per pupil (about $5,100) and instead deposits it into a private, restricted-use bank account. The family can then use those funds to purchase a wide variety of educational products and services, such as textbooks, tutoring, educational therapy, online courses, and homeschool curricula, as well as private school tuition. Low-income students and students with special needs receive 100 percent of the statewide average basic support per pupil (about $5,700). Unspent funds roll over from year to year.

The eligibility requirements for ESA programs in other states are more restrictive. In Florida, Mississippi, and Tennessee, ESAs are limited to students with special needs. Arizona initially restricted ESA eligibility to students with special needs, though lawmakers have since expanded eligibility to include foster children, children of active-duty military personnel, students assigned to district schools rated D or F, gifted students, and children living in Native American reservations.