February 12, 2025
Critics of ESAs in Iowa have misled the public about education savings accounts funding increases.
Iowa, starting next school year, will offer universal school choice. Any Iowa student will qualify for an education savings account (ESA), regardless of how much money their parents make.
As a result, there is an expectation that the number of students receiving ESAs will grow and bring an increase to the state budget for FY 2026.
This has brought the critics out en masse, largely Democrats, crying their usual refrain of “public money for public schools.”
In her proposed FY 2026 budget, Gov. Kim Reynolds proposed an increase of 44.3 percent for a budget of $314,649,945. The FY 2025 budget is $218,048,012.
Iowa House Minority Leader Jennifer Konfrst, D-Windsor Heights, took to X with a misleading claim.
Yes, ESA over four years will cost $1 billion dollars unless there is a sudden drop in students who use them. That’s just math, that’s fine. I do need to add that it will take the state four years to spend on ESAs which is roughly a 1/3 of what it spends in state foundation school aid in one year, but I digress.
Governor Reynolds’ proposed budget, State Foundation School Aid will see an increase of 2.7% raising the budget to $3,889,657,223. The FY 2025 budget is $3,787,626,194. But the difference of the 0.7% isn’t what I’m talking about. The ESA budget does increase by 44.3% to $314,649,945 in FY 2026 compared to $218,048,012 in FY 2025.
In terms of the entire state budget, State Foundation School aid in FY 2025 represents 43.62%. ESAs represent 2.01%. In FY 2026 that would be instead 41.23% for State Foundation School Aid and 3.34% for ESAs. Funny how ESA critics never discuss those numbers.
So you may wonder, what’s misleading?
State Rep. Konfrst is talking about the two percent increase in supplemental state aid per pupil. It’s currently $7826. This applies to both ESAs and state foundation school aid. Governor Reynolds and Iowa Senate Republicans agreed to two percent which would be a $157 increase per student – $7983. Iowa House Republicans would like a 2.25 percent increase which would be a $177 increase bringing the amount to $8,003. So the two chambers will haggle over essentially $20 per student.
Both the ESA budget and State Foundation School Aid budgets work off of that number. Those budgets are based on projected enrollment for the state foundation school aid budget (which is 487,243 students) and projected student recipients for the ESA budget – 39,415.
ESA scholarships and public school state foundation school aid will go up the same per student – either 2 or 2.25 percent depending on who gets their way.
This school year, the Iowa Department of Education’s certified fall enrollment for the 2024-2025 school year for public school districts was 480,665 (down from 483,699 at the same time in 2023). The certified enrollment of accredited nonpublic schools (the only schools where ESAs can be used) was 39,356, up from 36,195 in fall of 2023.
Basically, the Reynolds Administration projects a 7,000 student increase in public school district enrollment and budgets for close to 100 percent participation from those enrolled in accredited nonpublic schools. With ESAs being universal next year, it would be irresponsible to not budget that way.
So, is a public school student getting less money than a private school student? No, they get the same amount unless the private school family chooses not to take part.