~by Victoria Riley, GCNO publisher
Here’s a question for you: Why is Iowa’s program that uses millions of state tax dollars to pay students’ tuition at non-public schools called the Education Savings Account (ESA) program? There is no saving involved, but more and more spending of public dollars for a private cause.
Education Spending Account would be a more descriptive and more accurate name, particularly given the information State Auditor Rob Sand reported last week.
His audit showed that Odyssey, the New York-based company hired to oversee the disbursement of our money to faith-based schools, has charged Iowa a lot more than was expected, or at least, more than we were told about when the program began.
The 2023-24 school year was the first year the program was in place. Families whose income was at or above 300 percent of the federal poverty level were able to apply, and applications exceeded expectations. So did the funds required. Applications totaling an estimated $143.5 million were approved.
The Education Spending Account program is going into its second year, with families whose income is at or above 400 percent of the federal poverty level ($124,800 for a family of four) eligible this year. There is no income limit for the 2025-26 school year.
A whole lot of our public dollars are going to fund schools where crosses and crucifixes adorn classrooms and educational time is spent praying, worshipping, and studying the Bible. That comes at a time when Iowa public schools struggle to pay staff enough to retain them – particularly non-certified staff like cooks, custodians and bus drivers.
That’s enough to raise the ire of a lot of folks.
And now we learn, thanks to auditor Sand, “the taxpayers’ watchdog,” we not only paid more for kids to go to non-public schools than anticipated, we paid more to administer the program than we were told we would.
The state Department of Education’s contract with Odyssey called for a payment of $682,333.75 in the first year, with that cost $729,555 in subsequent years.
The state provides $7,864 per student to public school districts. ESA program administrative costs equaled what the state contributed to the education of 86 public school students in the past school year. In the coming year, it will be 93 students’ funding going to a New York company.
That’s without including a transaction fee that wasn’t disclosed until Sand did the audit. He learned that the Department of Education had amended the contract with Odyssey to include a transaction fee of 25 cents per $100 of qualified expenses, roughly 5 cents per every ESA transaction done through the system.
That equated to $267,250 paid to Odyssey in the fiscal year that ended June 30, 2024. $267,250 = state funding for 34 students. $682,335 + $267,250 = $949,585 = state funding for 121 public school students. I’m sure school superintendents, especially those in rural districts, could suggest other ways to spend that much money to benefit students.
Sands’ audit found that in the current fiscal year, the added cost will be $391,000, or as much as $587,000 if every one of the 30,000 students approved for ESAs uses the full $7,826 allowed per student.
How did the Department of Education not know there would be a transaction fee? Or maybe the fee was known but not divulged.
Gov Kim Reynolds brushed off the discrepancy, saying the contract with Odyssey is still much less than the contract offered by the next lowest bidder. Department of Education communications director Heather Doe said the fees are “a common and necessary cost” when using an e-commerce platform, reported Iowa Capital Dispatch. So why weren’t they included in the package from the start?
If watchdog Sand hadn’t called out the Department of Education on the increased charges, would the public have known? Spend, spend, spend, but don’t tell.
If Reynolds were really interested in education savings, she’d stop diverting public dollars to non-public schools.
What she’s interested in is education spending on children of parents who are more likely to fall into her Christian Right, anti-union, anti-Choice, politics before people way of thinking. And she’s using tax dollars from all of us to do that.
