A Second Special Meeting on SC's Neo-Voucher Bill

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Why aren’t we debating a policy that would effect the vast majority of children that we’re trying to help?

-Senator Brad Hutto

Session in the South Carolina General Assembly begins on January 14, but the Senate Education Committee has already held two meetings on a bill drafted in response to a recent Supreme Court decision, upheld in September, that struck down parts of a neo-voucher “Education Savings Account Trust Fund” bill that the Court said violated the state constitution.

The fast track.

As in the last meeting, it was clear that powerful figures in the legislature are fast-tracking this bill. Committee Chair Greg Hembree indicated there would be no more committee meetings (so no public comment) and the bill would go directly to debate on the Senate floor.

Senator Ronnie Sabb, towards the end of the meeting, voiced uneasiness about the speed of the work, saying, “The idea of not listening to persons who know, from the public, just from an education standpoint, I would just urge us to reconsider the idea of fast-tracking this to the point where it skips the committee process.”

Hembree responded, “We’ve received public comments in a binder that’s about that thick… We’ve made it available to members of the subcommittee.” He said the committee planned to post these public comments online.

How did we get here?

As Hembree summarized at the start of the meeting,

Last time, as y’all may recall, after Adams came out and we looked at that, it was a direct benefit versus and indirect benefit case, and the Court determined that the way the Governor was allocating the money was a direct benefit to the private schools, and that that violated the Blaine amendment. Got it. We get it, but, they said if it was an indirect benefit like some other things, well that would be okay. So we attempted to draft a bill… that in good faith attempted to build in an indirect benefit to the school— that the direct benefit was to the students and parents, but there could be an indirect benefit to the school. This Supreme Court said no.

The “Adams” Hembree referenced is the Supreme Court case Adams v McMaster, in which the Court found Governor Henry McMaster’s plan to use federal SAFE Grant COVID relief money to fund private school tuition violated the state constitution.

The “Blaine amendment” Hembree referenced is actually the part of the South Carolina constitution that explicitly prohibits the use public funds to aid private schools.

Hembree’s use of the term “Blaine amendment” is a reference to a popular pro-voucher talking point that seeks to tie any attempt to block state funding of private schools to the anti-Catholic Blaine amendment, a failed amendment to the US Constitution in the 1800s aimed at preventing states from funding Catholic schools. However, the use here is somewhat misleading, since the current SC Constitution was revised in 1973. The 1895 constitution did originally contain a Blaine amendment very close in language to the federal one¹; the language in the 1973 revision is much more direct in outlawing all direct public aid to private schools.

Impacts on funding

While some members of the committee, especially Senator Brad Hutto, voiced concerns that the new language of the bill was still a violation of the state constitution, much of the discussion focused on who would get the “education scholarship trust fund” money if the bill does eventually pass, and on how that would impact the state budget.

Members voiced concerns that the lottery, itself was an unstable funding source, and that using lottery funds in this way could both threaten higher education scholarship funding and incentivize students to leave public schools.

Senator Hembree, in his support of the bill, acknowledged that each time a student leaves the public school system (which the scholarship fund incentivizes them to do), that will remove all state aid to the school for that student.

Hembree even argued that public school districts would experience a “windfall” whenever a student leaves the public school system to attend a private school with their tuition paid for by state lottery funds. Hembree’s argument relied on his understanding of the “average” per pupil expenditure in South Carolina, which he said was about $19,000 per year. He may have been basing this on the projection from the state office of Revenue and Fiscal Affairs that the average district receives $18,842 per student.

There are some important caveats about this number that Hembree didn’t address.

First, that number is an average, and the actual total per pupil revenue for each district varies widely, from $12,562 per student in Dillon School District 3 to $30,058 per student in McCormick Schools. And this variation comes from a complex set of variables that includes the income tax capability of the district, the number of students with identified special needs, the number of students in poverty, and other factors that impact how much local, federal, and state money come into the district.

Second, that number represents a total of three different pots of money: federal funding (which is generally the smallest pot, and some of which is already allocated to paying for federal requirements, like educating students with special educational needs), local funding (which is heavily tied to local property values), and state funding (which is the money that districts lose when students leave the school to attend a private school, and which, for many districts, is by far the largest pot of funding).

Third, as educational advocates have pointed out, although schools received “per pupil” funding, losing a small number of students (and therefore the state funds allocated to each student) does not change the overall cost of maintaining a school building, hiring a teaching staff, and paying for all of the other overhead involved in maintaining a school.

And as Hutto pointed out, “Every student that’s already in the private school qualifies” to potentially receive the funds because the new bill raises the income cap to a level that allows most families in South Carolina to qualify, including those who can already afford to send students to private schools. According to Hutto, by year three after the bill’s passage, because of the raised income cap, the scholarship fund will be essentially “universal”. (And as, other states have demonstrated, universal school vouchers can ultimately cost states unexpected billions, particularly if the General Assembly removes the cap on the number of students who can receive funds.)

A “morphed” purpose

Hutto complained that the goal of the original bill— presented as a way to help lower-income students, had “morphed into not just poor children and not just poorly-performing schools,” but into an expanded program that would allow higher-income families attending high-performing schools to receive a taxpayer-funded subsidy to continue doing so.

Hutto estimated that initial the cost to the state budget— based on a cap of 15,000 students— will be “at least $100 million” because the General Assembly will have to make up reductions to lottery funds that are currently allocated, by law, to pay for higher education scholarships.

Hembree seemed to brush over Hutto’s points as he moved on to remarks about public school funding per pupil, complaining about what he called the “worn-out narrative that we underfund public schools”. (In fact, the General Assembly has, under definitions set in law, underfunded schools for the better part of two decades.)

Hembree also seemed to contradict himself somewhat by pointing out specifically that some lower-income districts are receiving large funding amounts. Of course the largest pot of money for these districts is the very state funding that Hembree had already acknowledged those districts would lose when students left for a private school.

At one point, Hutto had a somewhat testy exchange through Donna Barton, who drafted the new language. Hutto made the point that a family could receive “a check for $8,000,” essentially, to continue paying for a private education it could already afford, at state taxpayer expense. Barton shot back that they could only receive what the educational expenses actually cost.

Hutto: “As soon as you tell schools what the check is, that’s what they will say the tuition is.” (There is research to support the prediction that passing this type of bill will, in fact, cause private schools to raise tuition.)

Other concerns

Senator Darrell Jackson pointed out that lottery funding for “needs-based scholarships,” unlike LIFE and HOPE, are not guaranteed. “There is a chance that needs-based scholarships could suffer as a result of this.” Hembree said they would keep this issue in mind as the bill moved forward, but didn’t offer plans to hear from any experts on the issue before bringing the bill to the floor.

Hutto also asked, “Are we going to subsidize virtual school at home?” Barton acknowledged that a small number of families had already used neo-voucher funds under the previous iteration of the bill to pay for virtual services. (This was noteworthy because a backlash against virtual schooling became a major driving force in the General Assembly during the height of COVID.)

1. SC’s 1895 constitution, Article XI, Chapter 9: “The property or credit of the State of South Carolina, or of any County, city, town, township, school district, or any other subdivision of the said State, or any public money, from whatever source derived, shall not, by gift, donation, loan, contract, appropriation, or otherwise, be used, directly or indirectly, in aid or maintenance of any college, school, hospital, orphan house, or other institution, society or organization, of whatever kind, which is wholly or in part under the direction or control of any church or of any religious or sectarian denomination, society or organization.”

The text of the proposed federal Blaine amendment: ”No state shall make any law respecting an establishment of religion or prohibiting the free exercise thereof; and no money raised by taxation in any state for the support of public schools, or derived from any public fund therefor, nor any public lands devoted thereto, shall ever be under the control of any religious sect, nor shall any money so raised or lands so devoted be divided between religious sects or denominations.”

SC’s 1973 revised constitution, Article IX: “No money shall be paid from public funds nor shall the credit of the State or any of its political subdivisions be used for the direct benefit of any religious or other private educational institution.”