FISCAL NOTE

House Bill 633 as introduced creates the Education Savings Account (ESA) program which would allow parents of eligible students to establish ESAs and use funds in the ESAs for an education program of the parents’ choosing, beginning with the 2021-2022 school year. This bill requires the State Department of Education to deposit into the ESA of each participating student an amount equal to 95% of the calculated amount of state funding a school district would have received for an eligible student that would have been assigned to the school district, which is approximately $5,800 for fiscal year 2021. This bill could increase the obligations of the Education Trust Fund (ETF) by this amount for each student that elects to participate in the program that is not currently enrolled in a public school. This bill would likewise decrease the amount ETF of funds received by local boards of education by this amount for each student, currently enrolled in a public school, that elects to participate in the program.

In addition, this bill will increase the administrative obligations of the department by requiring the adoption of rules for the administration of the program and to carry out the provisions of this bill, which include the auditing of ESAs annually; however, the increased obligations may be offset, wholly or in part, by (1) any fees established by the department for private financial management firms authorized to manage ESAs and/or (2) the administrative fees totaling 1% of total program funds, retained by the department.