Public Funding of Empowerment Scholarship Account Should Mandate Public Accountability
Wednesday, May 8th, Missouri Governor Mike Parson signed two controversial School Choice bills, SB 727 and HB 2287, into law. The new law these combined bills enact should concern every Missouri tax payer.
In Missouri today, approximately 30% of public education is paid by the state, 10% by the federal government and 60% from local sources – primarily from real estate taxes. Missouri ranks 49th in the United States for state funding, therefore, Missouri state government contributes less than almost all other states to education. The already low level of state funding is also important because money received by local school districts from the state and federal governments is dependent on actual enrollment in the district. Beginning in 2026, public schools will lose state and federal funding for students who leave the school district because of taxpayer paid scholarships to private schools. Now that Governor Parson has signed these bills into law, local funding for public schools will exceed the current 60%.
The statute created by SB 727, the bill that contained the bulk of the School Choice provisions throughout session, does not reform education, it does not provide choice; it shifts tax money from public schools to private entities. Those private entities are not bound by the Constitution and are not accountable to the people.
SB 727 does not reform education, it does not provide choice; it shifts tax money from public schools to private entities. Those private entities are not bound by the Constitution and are not accountable to the people.
SB 727 authorizes DESE, a state department created by RSMO 161.020 and overseen by the Missouri State Board of Education created by Article IX, Section 2(a), to make the rules for taxpayer provided “empowerment scholarships” to private schools. DESE is the source of policies and rules that shrink the authority of parents and their elected school boards. DESE is also the source and enforcer of the Woke agenda, DEI, Social Emotional Learning and a new comprehensive sex education program that imposes upon school children, state initiated dogma and propaganda in matters and topics rightly within the sole authority of parents. (RSMO 160.527, passed in 2023, authorizes participation by private nonprofits in this new program, not parents).
The law SB 727 creates will increase teacher salaries significantly, about 60% for starting pay, without providing funding. Local government will bear this unfunded state mandate. Real estate taxes will increase. Though teachers deserve a pay increase, that decision should be made at the local level because 1. local taxes pay for salaries and 2. the cost of living is different in a small community versus a large city.
SB 727 increases teacher salaries significantly, about 60% for starting pay, without providing funding. Local government will bear this unfunded state mandate. Real estate taxes will increase.
When private schools take tax money they are government controlled by conditions attached to the dollars. Students and their families lose privacy and choices.
The Missouri Empowerment Scholarship Act passed in 2021; that year tax money started going into the Empowerment Scholarship Account. SB 727 increases the amount of tax money going into the Empowerment Scholarship Account from $50 million per year to $75 million per year. These amounts are funded entirely with taxpayer money through a state-sanctioned money laundering system – that is – donations to the account are given back to the donor with a 100% tax credit. Donations cost the donor nothing.
The most likely donors to the Scholarship Account are private businesses that benefit, for example: charter schools, virtual learning providers and school management companies that operate public schools.
Money, stocks, bonds and marketable securities that are “donated” to the Scholarship Account are not received by the state treasurer. They are placed by Education Assistance Organizations (private non-profits) with private financial management firm(s). Pursuant to this arrangement as written in the statute:
Ninety percent of the earnings from the “donations” are paid out in scholarships for students. The principal of the Empowerment Scholarship Account, that is, the actual “donations” – our tax dollars ($50 million per year, soon to be $75 million/ year), are not paid out in scholarships. Those “donations” are invested in some undisclosed account determined by the financial manager.
The legislature did not provide transparency in the Empowerment Scholarship Act or SB 727. We, the people, cannot know who donated and in what amounts to the Scholarship Account, where the account is invested, how it’s invested, what it earns, what the fees are and how much is paid out to students. The legislature did not require financial reporting to the public and only minimal reporting to the state treasurer. The Scholarship Act focuses reporting on grades and graduation rates, not on reporting how our tax money is invested and spent.
Are the fees reasonable? Is the principal safe? Has it wandered off? Is it managed by people with conflicts of interest? These questions and more need to be answered before more taxpayer money is paid into the Empowerment Scholarship Account. This is our money, we need answers.
What can you do? Call Governor Parson’s office and tell him your concerns. This new law is seriously flawed. The Empowerment Scholarship Account must be audited and the public informed.
Does this concern you?
Governor Michael Parson
(573) 751-3222
Informed Health Choice Legislative Team
IHCM.info
