Costs soar for Iowa's school voucher plan

Randy Richardson is a former educator and retired associate executive director of the Iowa State Education Association.

Governor Kim Reynolds and the Republican-controlled legislature agreed to a budget that allocated $107 million in fiscal year 2024 to pay for private school vouchers for an estimated 14,068 students. But the number of Iowans who applied for “education savings accounts” vastly exceeded that number: 29,025 applications by the June 30 deadline.

The good folks at the nonpartisan Legislative Services Agency, who usually do an excellent job of forecasting costs, calculated the original estimate. However, when the actual number is more than double your forecast, something is off somewhere.

A July 6 news release from the governor’s office provided some additional data about the voucher applications. Of the 29,025 applications, about 17,481 have been approved. The state will continue to process the remaining applications up until the July 15 deadline. Of course, having an application approved by the state doesn’t guarantee students a seat in a private school classroom. According to estimates released by the governor’s office, private school leaders have indicated they have room for about 9,000 new students.

At first glance it seems like there is a big difference in the number of applications and the number of spots available in private schools, but things aren’t always as they appear.

When you look more closely at the numbers, you will find that approximately 60 percent of the applicants are students who already attend a private school. That doesn’t include approximately 3,200 students who are entering kindergarten this year and would normally be attending a private school. While the governor didn’t provide the exact numbers, we can guesstimate that there were roughly 17,415 (more than 20,000 if you count incoming kindergarten) private school students who will now have most or all of their tuition paid with a taxpayer-supported voucher.

Last year, total private school enrollment in Iowa was 33,692. By my estimates, that means 51.6 percent of existing private school students will soon be on the public dole.

Reynolds and Republican legislators have consistently portrayed vouchers as beneficial to low-income families who needed to escape the “failing” public schools. The numbers the governor’s office released yesterday show that’s not entirely accurate. The average net family income for the existing private school students who applied for a voucher is just $62,199. Obviously these folks fall into the lower income ranks.

However, the students who applied and who don’t currently attend a private school have an average net family income of $128,507. That figure is more than 400 percent of the Federal Poverty Level.

It’s also important to mention a pesky three letter word that now appears in the application process…”net.” In order to determine who qualifies for a voucher, Republicans have determined that income will be based on a family’s “net” income—that is, the family’s income after tax deductions. So an average family who applied for this program and who took a standard deduction on federal income taxes of $25,900 might actually have a gross income of well over $150,000.

For comparisons, an income of $122,401 would put an Iowa family in the top 20 percent of all wage earners in the state.

I’m not implying that these numbers are evidence of white flight in the application process, but it certainly appears that way.

The governor has indicated she hopes to fund all students who applied for a voucher, regardless of the cost. Not everyone who applied this year will qualify, given the ceiling for family incomes of 300 percent of the federal poverty level (that will rise to 400 percent in year two). But this year’s application numbers give us an idea of just how expensive this program will be, especially after income limits go away in year three. The state plans to give a voucher worth $7,635 to every student who applies. That alone would cost $221.6 million.

The voucher plan also contains an additional cost. The state will pay public schools $1,205 per student for every student who leaves the public school to attend a private school. It’s a little trickier to get that number, but here is a good estimate. Of the 29,025 voucher applicants, roughly 40 percent were not in a private school last year. That comes out to 11,610 students.

However, we also need to back out approximately 3,200 incoming kindergarten students who were never going to attend a public school, so now we’re looking at about 8,400 students who intend to leave the public schools. That’s an additional $10.1 million in cost. That brings the total cost of the school voucher program to an estimated $232 million. Keep in mind that the original estimated cost of this program was just $106.9 million in the first year.

What does this mean for our public schools? The biggest problem initially will be confusion about where students are enrolled. Just because a student is approved for an education savings account doesn’t mean they will actually get accepted into a private school. In addition, some number of students who begin attending a private school will quickly decide it’s not for them.

Either way, public schools are also going to take a significant financial hit. If all of the estimated 8,400 public school students leave, then public schools will lost out on approximately $54 million in state funding. That’s going to require schools to shuffle some teachers between grades, based upon where the need is. Schools will also need to reduce staff significantly next year to better match their new enrollment numbers.

Despite all of the Republican rhetoric about the failing public schools and the superiority of private schools, no definitive study shows that to be true. Republicans are simply out to destroy public schools.

Imagine what public schools could do if a Republican legislature was willing to invest an additional $178 million in our public schools. (CLARIFICATION: To calculate the net new cost to the state of school vouchers, you would need to subtract the $54 million that won’t be going to public schools from the $232 million price tag for the voucher plan.) The additional resources that could be brought to bear using that money would almost assuredly increase student performance and help restore some of the losses that took place during the pandemic. Unfortunately, under our current elected leadership it’s unlikely this will ever happen.

Top image cropped from “Milwaukee Public School Teachers and Supporters Picket Outside Milwaukee Public Schools Adminstration Building Milwaukee Wisconsin 4-24-18 1053” by, licensed under CC BY-SA 2.0.

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  • Vouchers are in great demand - public schools better bring their "A" game

    I didn’t vote for Gov. Reynolds but support pro-school choice vouchers. From the numbers that have applied they are a success and will bring some much needed competition to public schools. Parents and students have more mobility as not everyone can afford a private school. Public schools better bring their “A” game or you will see even more students flee public education next year. As public school attendance dwindles there will be fewer teachers needed in public schools – teachers union doesn’t like competition or scrutiny for that matter. Vouchers are a big win for students and families who wish to escape their local public school as many will now have the means to do so.

    • It's not about competition

      The new entitlement is not about competition to make public schools better. If it was, the law wouldn’t be siphoning $54 million from public schools. If it were about competition, the private schools would be required to accept all students just like the public schools do.
      No, the law is the governor’s way to prove her right wing creds to climb the political ladder. This will be a fiscal nightmare for Iowa especially because there will be no accountability for the money. Attacking the union won’t solve this problem. By the way, “moderate” has always meant the middle. Your argument is so far to the right, you can’t see the middle.

    • "much needed competition to public schools"

      In no particular order the above is:

      1) Bullshit
      2) Asinine
      3) A Republican talking point
      4) Written by a recently habitual troll to this site

      Public schools have been hamstrung in so many ways by decades of Republican policies of death by a thousand cuts. And not just financial in nature; Bruce can and does better speak to those things than I can.

      You can’t blame parents for taking advantage of this latest round of Republican sponsored socialism for corporate or religious entities. Medicare Advantage and privatized Medicaid both needlessly introduced higher costs and inefficiencies and waste and fraud into these government programs. Now schools.

      And many are fine schools and will continue to be that. But a door has been opened wide by Republicans for fraud. How quickly that comes to pass, time will tell.

      In the meantime, who knows, maybe some private schools will feel motivated to teach some historical truths that Republicans have silenced in public schools. The law couldn’t touch the privates, unlike the publics, where any attempt at competition with their private counterparts in teaching certain truths is now legally perilous. May we some day read an account of that sweet karma.

      Bruce, median income stats in addition to average income stats would allow for a better understanding of what is occurring, IMO. Is that available?

  • A game?

    Someone is being willfully ignorant about this..and it’s not Mr. Lear–a lifelong educator. How do you bring your so-called A game when the referee (in this case, the Governor) moves the goalposts, raises the basket, and shoots the tires off the team bus? (yeah, a ridiculous analogy–just as ridiculous as anyone believing this is about “school choice.”) Most Iowans believe in their public schools (and the rest of the public trust) and deeply resent backdoor privatization for….what?
    Oh yeah…KR wants to be VP.

  • Regular Order

    The school voucher legislation also highlights a problem that has been occurring for years at both the state and federal level – and by both parties – as legislation is rammed through legislatures . . . the absence of traditional regular order.

    For decades the committee process had been used to develop legislation. The process promoted engagement by both elected officials and the public. Initial proposals could be vetted and improved as policy experts and others offered insights regarding the potential impact of legislation.

    When John McCain voted “no” to essentially block the Senate GOP’s nearly successful effort to repeal the Affordable Care Act, he cited as the reason for his vote the absence of regular order.

    It’s no surprise that the Iowa GOP’s voucher plan is already showing signs of financial concerns ahead. There was no meaningful vetting. And it’s only the top of the first inning.

  • willing to give it a chance before automatically labeling it a failure

    My next door neighbor enrolled in the voucher program. Single mom who works a fulltime and a part time job to make ends meet. She’s thrilled to have a chance to send her son to a private school. This is exactly the type of family that needs help. Good work ethic and struggling to survive in these inflationary times. As a Democrat I’m willing to see what happens over the next few years before automatically condemning vouchers.

  • Not Convinced

    HHH . . . I hear ya, but public money for largely religious schools? Private schools that can cherry pick students? Do not have to meet the same regulatory standards as public schools? Not a level playing field.

    • life is not a level playing field

      Very true that private and public schools don’t have the same standards. Life in general isn’t a level playing field either or we’d all be born a Kennedy or a Rockefeller with a generous trust fund. Some of us have a higher IQ and/or a better work ethic than others. As Democrats we shouldn’t blindly condemn vouchers but have the wisdom and patience to see how it all plays out. As for my single Mom neighbor with the school voucher I’m happy to see her family’s dream come true.