Dr. Oran Smith Delivers Testimony on ESTF “Homeschooling” Bill

I recently testified before a Senate Education Subcommittee regarding S.692, which would eliminate “Option 4” homeschooling – or, more accurately, “unbundling’ – from the ESTF program.  Below is the transcript of my testimony.  My remarks have been edited for clarity, since they were not delivered from a prepared text.

Palmetto Promise has been the evangelist for school choice, going back to when we were founded. Oddly enough, 13 years ago today, Palmette Promise was started.

I would like to cover two general topic areas. One, ESA origins, and two, the origins of the Education Scholarship Trust Fund—the ESA concept (or mechanism), then the South Carolina history. I hope this will be helpful. It is designed to be a briefing, and I’ll be very quick.

First of all, there are generally three mechanisms for funding private school choice in America. There are Vouchers. They’ve been around since just after the Civil War. That’s where you take a piece of paper that works like cash, and you redeem it for tuition. Tax Credit Scholarships were invented to get around Blaine Amendments because the funds never come into the hands of the state. So you take a tax credit, you give funds to a private organization, then that organization distributes scholarships. Then the new one, ESAs, originally called Empowerment Scholarship Accounts in Arizona.

Arizona had taken a shot at passing a school choice bill in roughly 2008 that they called “Lexie’s Law.” We would consider “Lexie’s Law” a pretty standard school choice program, probably more like a voucher program. That became an issue of controversy in Arizona, and it went to the Arizona Supreme Court as Cain v. Horne. In Cain, the court said in 2009, “Nice try, General Assembly of Arizona, but what you’ve done here is you’ve created a benefit program for private schools. It looks like a school choice, but it’s really just a way to help private schools.”

That was the view of the court. They felt it was a direct benefit to private schools.

So in Arizona, they come back with a new concept. Again, to reiterate, there have been Vouchers, there have been Tax Credit Scholarships. This new concept was called an Education Scholarship Account. You have a debit card, and that debit card would be especially coded so it could only be used for educational expenses. There would be this cafeteria—many different education options for the ESA card. That was the key part of that second attempt that the Arizona legislature passed in 2011.

So, then they’re back up in court in Arizona in 2013, Niehaus versus Huppenthal, which was an Arizona Appeals Court case where the court agreed that this was very different than the previous program under “Lexie’s law.” You really did have a choice here. It just wasn’t private schools. There were lots and lots of different choices you could use to customize an education for your child. It was not a direct benefit to private schools because of the diversity of the options. So that’s where it stands in Arizona, and that became the basis for what has been done around the country. That’s the legal history, and that is the ESA origin, which came out of Arizona and Florida, but mostly Arizona.

Let’s go quickly through South Carolina history here. In 2016, Palmetto Promise, as best I can tell, wrote the first blog post in South Carolina about what an ESA was and attempted to explain to the people of South Carolina the ESA concept. We called it the “iPhone of education” then because [education] was going to be completely customizable. It’s truly setting up a very specific cafeteria plan or items for your child.

In 2019, we got S.556, and three of the co-sponsors for that bill were Senators Massey, Turner, and Hembree. It produced many hearings, including Senator Jackson and Senator Hutto. Still to this day, contributions from all of you on this subcommittee are in the statute. I think every single one of you had something to do with that.

The bill did not pass in 2019, but then there was the pandemic. In 2020. GEER funds were allocated by the feds through the states. Governor McMaster set up a program to operate during COVID called SAFE Grants. SAFE grants were going to be an ESA-type program, but SAFE was very heavily structured around private schools. You can hear Arizona [cases] whispering in our ears again here. It was very focused on private schools.

So, in 2020, we get Adams v. McMaster from the State Supreme Court, and SAFE grants are found to be a direct benefit. Of course, the state constitution says that an indirect benefit is okay, because of the 1972 revisions to the state constitution.

Then along comes S.39, which was sponsored by Senator Grooms. That’s where we got our first ESTF program. But then, once again, we have a case in 2024, Eidson v. South Carolina Department of Education, that found it to be a direct benefit.

Finally, we get S.62, sponsored by Senator Hembree, which made revisions to the ESTF program, including being very clear about what a trust fund is. But again, many options, echoing what we learned from Arizona [cases]. Many options, a portal as opposed to a debit card, and this cafeteria plan.

Many options for crafting an education that fits your child.

For us, the fact that there are so many options, which helps us legally in light of the Arizona legal history, but also it makes it even more customizable. So that was what was in our minds as the legislation was progressing.

So I simply offer that history as our thoughts.

If we take out the independent school option from that list, and we take out public school classes, does that mean that everything else [every other allowable expense] is supplemental? So you’ve got to go to a school, then you can supplement it with items from that long list? [We don’t agree with that.]

When we saw the list [in the legislation], which we’ve seen in every school choice ESA program in the country, we saw a cafeteria. [A parent might say:] “I want counseling, I want this and that. But I must cover math, science, etc.” “I’m going to do that online, and I’m going to do that with a tutor, and that’s my program. I’ve created my program.”