Funding for school vouchers stirs controversy
NASHVILLE — Tennessee Lt. Gov. Randy McNally and House Speaker Cameron Sexton expect Gov. Bill Lee’s administration this week to cite exactly which state code provisions officials relied on to justify raiding an unused state education department fund to award a noncompetitively bid contract to run the state’s new school voucher program.
“We’re asking the admininistration where the authority is to do it like that,” McNally, the Republican Senate speaker, told reporters last week. “And they have promised to get back to us by early [this] week.”
McNally said that’s “one of the things I think the commitees of both the House and the Senate really drill down on — and whether people are avoiding going to Fiscal Review [Committee] in an effort to kind of hurry-up projects.”
Sexton, R-Crossville, told reporters last week that “we just think it’s appropriate that if any new contracts are let out by an agency that they come through the Fiscal Review process first. There seemed to be a controversy on the precedent where the governor’s Education Savings Account bill contract didn’t come through Fiscal Review.”
The Fiscal Review Committee is a key institution in the General Assembly. Its creation in 1967 is widely seen as one of the first, if not the first, significant steps taken by legislators
lators to free themselves from decades of nearcomplete domination by Tennessee governors.
Its powers include review of nonbid contracts, continuing review of items such as revenue collections, budget requests, the recommended budget, appropriations, work programs, allotments, reserves, impoundments and the condition of the various state funds.
Education Commissioner Penny Schwinn and department officials bypassed the competitive bid process as well as the Fiscal Review Committee to award a two-year, $2.53 million contract to Florida-based tech firm ClassWallet to run Republican Lee’s already controversial Education Savings Account program.
ClassWallet has been tasked with managing online accounts and applications for the initiative.
Sexton, R-Crossville, said after the situation “came to light, we started talking to Fiscal Review and to the director — and this isn’t the first time that a no-bid grant contract was approved. And they say it’s happening more frequently, and so we’re looking at that as well.”
Sexton and Sen. Todd Gardenhire, R-Chattanooga, vice chairman of the fiscal review panel, have introduced legislation stating in no uncertain terms what lawmakers have seen as their prerogative to review no-bid contracts.
Lee’s voucher-like program was one of his signature first-year victories in 2019, although any number of compromises, bargains and controversies accompanied it.
As enacted, it allows low-income families in Metro Nashville and Shelby County to use public tax dollars to send their children to private schools and pay for related expenses.
Lawmakers approved $771,300 for its firstyear funding, with many Republicans believing the Education Savings Account program wouldn’t be operational until fall 2021. But with Democrats and some Republicans wanting to repeal the law, Lee’s administration is rushing to have it up and going this fall.
Metro Nashville and Shelby County schools have sued the state, saying lawmakers violated the Tennessee Constitution by narrowing it to only the state’s two largest school systems. The administration and supporters of the law argue that’s allowable because, among other things, it’s a “pilot project.”
Last week, House
“I care more about kids in the state than I do about a process that is trying to be hampered by those who are detractors to a process.”
— TENNESSEE GOV. BILL LEE
Finance Vice Chairwoman Patsy Hazlewood, a Signal Mountain resident who voted for the Education Savings Account bill after Hamilton County was stripped from it, was among lawmakers sharply questioning the administration’s rush job to implement it during a tense Finance subcommittee hearing.
“Who decided and [under] what legislative authority moved the start date back on the legislation that we passed?” Hazlewood asked Schwinn, saying she thought the start date was August 2021.
Schwinn replied that “as commissioner, I am certainly responsible for the decision.”
In passing the fiscal year 2020 budget last spring, lawmakers set aside only $771,300 for the Education Savings Account program. But education officials stripped additional funding from a defunct Master Teachers program account. In addition to awarding the contract to ClassWallet, the state has an option to extend it for three more years for up to $6.3 million, Chalkbeat Tennessee has reported.
A defiant Lee last week defended his administration’s use of a non-competitive grant process and stripping $1.5 million in funds from the defunct Master Teachers account to hire ClassWallet.
“I care more about kids in the state than I do about a process that is trying to be hampered by those who are detractors to a process,” Lee told reporters.
Gardenhire told the Times Free Press recently that “we just think it’s appropriate that if any new contracts are let out by an agency that they come through the Fiscal Review process first. There seemed to be a controversy on the precedent where the governor’s Education Savings Account bill contract didn’t come through Fiscal Review.”
The bill “is an effort to clarify that,” he said. “To make sure in the future that no matter what the [contract] is, it comes through the proper process. We’re looking to ensure that the process of state government is done in the proper fashion, no matter who the governor is and no matter what the issue is.”