Tennessee Governor’s Education Savings Account Plan Still Faces Hurdles

Lockeland Elementary School in Nashville. The Tennessee Supreme Court ruled that a measure to allow private school vouchers in only Davidson and Shelby Counties don’t violate the state’s home rule law.(John Partipilo via Tennessee Lookout)

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Despite a Supreme Court ruling in favor of Gov. Bill Lee’s education savings accounts, the program is far from taking effect as it faces a winding path through litigation and, potentially, legislative resistance.

The high court found the voucher program doesn’t violate Tennessee’s Home Rule Amendment even though it targets Metro Nashville and Shelby County school districts and sent the case back to a three-judge panel to consider other questions dealing with equal protection and education clauses in the state Constitution. And yet another lawsuit brought by parents in Davidson and Shelby counties could change the outcome.

Meanwhile, Metro Nashville officials are considering whether to ask the Supreme Court to reconsider the matter, according to Law Director Wally Dietz. That step would have to be taken by May 31.

“We are considering all options at this point … and we’ve not made a final decision,” Dietz said this week.

An injunction that stopped the program from proceeding is expected to be dropped, meaning the state could start issuing funds through the narrowly-approved Education Savings Account program when it is ready.

Even though the case is going back to a three-judge panel made up of Davidson County Chancellor Anne Martin, who initially found the program unconstitutional, and two other judges, no injunctions are tied to other aspects of the case.

Despite a ruling from the Tennessee Supreme Court that apparently clears the way for public money to be used for private schools, even Gov. Bill Lee is unclear about how soon the program can launch, saying several steps are in order before it could be implemented in March.

Unless the Supreme Court reconsiders its decision or the trial court issues an injunction based on those pending claims, the timing would be up to the state, according to Dietz.

“That’s a decision they’ll have to make, certainly whether they want to go forward in the face of the litigation,” he said.

The governor himself is also unclear about how quickly the Department of Education could put the program into place. 

For the program to launch this August, several steps would have to “come to fruition,” the governor said. “But we are certainly hopeful that we can.”

Still, Lee is hesitant to promise a start, acknowledging to reporters in May that numerous legal decisions have to be made. “And until those are made, there can’t be any steps.”

Instead, the governor prefers to call the court’s decision “an encouraging moment” and a “good first step.”

“We think that every kid in our state ought to have access to a high-quality education,” the governor says, adding the decision will allow low-income students in Shelby and Davidson County, the majority of which are minority children in lower-performing schools, to find another option. 

Under the plan, 5,000 students would be able to use $7,300 in state funds and local dollars to enroll in private schools in the program’s first year, with the number increasing to 15,000 in five years. The Legislature approved $29 million in its fiscal 2022-23 budget for the program.

Metro Nashville officials argued that the program would rob the district of tens of millions over the course of the program.

But per the high court’s ruling, the act doesn’t violate the state Home Rule Amendment because it applies to the Metro Nashville and Shelby County school districts, not the Metro Nashville and Shelby County governments that brought the lawsuit.

Before the program starts, though, the case must go back to lower courts to deal with other legal questions about equal protection and education. The Supreme Court was tasked with ruling only on the matter of the Home Rule Amendment, a 1953 provision prohibiting the Legislature from passing bills that single out local governments without approval by local governments or local voters.

In addition, a group of parents from Davidson and Shelby counties are challenging the law, contending it violates the equal protection clause of the Constitution. The three-judge panel could decide to merge that case with the other litigation. 

Depending on those outcomes, the case is likely to be appealed by either losing side, which means it could return to the Appeals Court and Supreme Court.

The high court found that Metro Nashville and Shelby County had standing to challenge the program, but a majority of justices also determined the Education Savings Account Act doesn’t require a two-thirds vote of the local legislative body or a majority vote by local voters to take effect. Thus, the “constitutional challenge fails as a matter of law,” according to the ruling.

The majority opinion written by Chief Justice Roger Page determined that the act in this case doesn’t apply to cities or counties such as the plaintiffs, Metro Nashville and Shelby County. Metro Nashville School Board had previously dismissed as a plaintiff.

The majority of the high court took a completely different view than Chancellor Martin, who said school systems can’t be viewed as separate from the local governments that fund them, calling them “truly a partnership.” Likewise, the Court of Appeals relied on the “financial relationship” between the county governments and the school system to make its decision.

Metro Nashville and Shelby County argued that they would have to maintain funding for students even if they switch to private schools, costing them millions of dollars. 

But the Supreme Court agreed with the state and an intervening party in the lawsuit, Natu Bah, in finding that the Home Rule applies to the county or municipality, but not the school district.

“… We conclude that the ESA Act regulates and governs only the conduct of the (local education associations), not of the plaintiffs,” the ruling states.

Furthermore, the majority opinion found county governments and school systems to have separate origins, functions and management and that the “separateness of plaintiffs and their respective (local education associations) is ameliorated by their financial connections.”

Page was joined in the majority ruling by Justice Jeff Bivins and Appeals Court Judge Skip Frierson, who sat in for new Judge Sarah Keeton Campbell, a Lee appointee. She was named to the bench after Judge Connie Clark died last September at age 71.

Dissenting were Justices Holly Kirby and Sharon Lee, who wrote in a dissenting opinion that the Education Savings Account Act would harm the local governments financially as well as their ability to govern themselves. She pointed out local governments are responsible for levying taxes and approving budgets for school districts, making them inseparable.

The state’s counties and cities “derive their power from sources other than the prerogative of the legislature” and enjoy constitutional protections from local legislation enacted without their approval, Lee wrote.

Senate Minority Leader Jeff Yarbro, a Nashville Democrat, says the timeline for the voucher program is unclear but that it isn’t on “sound legal footing,” either. He argues the case should be resolved before the state starts taking money from public schools to put into what he calls a “discriminatory private school voucher program.”

gram,” is not on “sound legal footing.” Yarbro is an attorney. (John Partipilo via Tennessee Lookout)

“The court’s decision elevates form over substance in every way. It’s a hyper-technical decision that is contrary to the court’s own precedence and the history of the Home Rule Amendment,” Yarbro says.

Tennessee Attorney General Herbert Slatery did not speak about the legal aspects of the court’s ruling in its aftermath, instead focusing on policy in a statement, “The Education Savings Account program has always been about helping Tennessee students – giving eligible families a choice in education, an opportunity they currently do not have. It challenged the status quo – a move that is always met with resistance. We applaud the court’s decision that this pilot program is indeed constitutional. While there are further court proceedings that need to take place, this is a major step forward.”

House Speaker Cameron Sexton, who voted against the act twice in 2019 but has been more amenable to voucher programs in the last year, neither criticized nor hailed the decision.

Sexton’s spokesman Doug Kufner said, “As you know, the ESA program still faces some additional legal steps in the lower courts. We’ll just have to wait and see how that all unfolds.”

Lt. Gov. Randy McNally, who voted for the act and welcomed the court’s ruling mid-May, “trusts” the Lee Administration to start the program when it is “legally permissible and logistically feasible,” according to spokesman Adam Kleinheider.

On May 24, House Majority Leader William Lamberth, a proponent of the act, said he never felt the Home Rule Amendment applied to the law passed in 2019.

The Portland Republican said he hopes the act can benefit students in Metro Nashville and Shelby and raise “their standard of education up to where most of the rest of the counties in the state are.”

“That was always the problem with what we were trying to address, you had children particularly in two counties that simply didn’t have the same opportunities that children in other counties did,” Lamberth said.

An attorney by trade, Lamberth said other litigation at the trial court level should be “relatively straight-forward” for the court to address quickly.

He predicted no hold-ups in the Legislature, even though 16 House members who voted for the measure in 2019 are no longer serving in the General Assembly. Funding was set aside the last two years without a squabble in the Legislature.

Lamberth didn’t feel the Legislature’s move was a form of “overreach” either.

“It is literally a constitutional requirement of ours, the state of Tennessee, to provide for an educational opportunity for every child throughout the state. We obviously have a couple of districts that are simply not … it’s the shared responsibility of the state and the local government, but when you have some local school districts that need some additional tools to be able to provide every child within their district with a great education, that’s our responsibility at the state level,” Lamberth said.

An attorney by trade, Rep. William Lamberth, R-Portland, predicts no holdups in the Legislature, even though 16 House members who voted for the measure in 2019 are no longer serving in the General Assembly. (John Partipilo via Tennessee Lookout)

Yarbro, in contrast, said he expects the Education Savings Act to run into political problems in the Legislature because Tennesseans don’t support it.

“Vouchers for private schools aren’t very popular with real-life voters,” Yarbro says. He points out the program has been “marred” by ethical and legal investigations since it passed.

Initially, the bill applied to Metro Nashville, Shelby, Knox, Hamilton and Madison counties, but the latter three were removed from the bill in order to gain passage.

Former House Speaker Glen Casada held the vote board open for nearly 45 minutes in April 2019 to work the chamber for one more to break a 49-49 tie. Ultimately, Rep. Jason Zachary, R-Knoxville, decided to change his vote to yes with the agreement that Knox County Schools would be removed as a voucher district.

The Senate passed the measure 19-14 with a more narrow definition of “eligible students,” including only children in districts with 10 or more “priority” school districts in 2015 and 2018 that were among the bottom 10% of school rankings in 2017. That meant only students in Metro Nashville and Shelby County school districts would be eligible for the Education Savings Account Act.

And because it contained no provision for a vote by the local legislative body or Metro and Shelby voters, the question about Home Rule was raised.

Since then, the FBI has been investigating the Legislature to determine whether illicit offers were made in return for votes. 

Rep. Kent Calfee told the Tennessee Lookout this year he heard Casada discuss calling the governor to offer state Rep. John Mark Windle the rank of general in the National Guard in return for his vote. Casada has denied it, and the governor has said he knows nothing about it.

No indictments have been made in connection with the incident, but Rep. Robin Smith resigned from the Legislature this year after being linked to Casada and his former chief of staff, Cade Cothren, in a kickback scheme involving a phony campaign vendor.

Tennessee Lookout is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Tennessee Lookout maintains editorial independence. Contact Editor Holly McCall for questions: info@tennesseelookout.com. Follow Tennessee Lookout on Facebook and Twitter.

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