Court hearing raises question of when new KY school choice law will be implemented

A controversial new state law takes effect June 29 designed to give families more options in deciding where to send their children to school, but it is not clear when the law will be put into practice, if ever.

Franklin Circuit Judge Phillip Shepherd asked Thursday during a hearing on a lawsuit that challenges part of the new law — House Bill 563 — if it will be implemented this upcoming school year or in the 2022-2023 school year.

Attorneys for the state Finance and Administration Cabinet and Department of Revenue said the state is working on implementation of the new law but several more steps, such as coming up with administrative regulations, must be taken.

Shepherd set a July 7 hearing for a request by Council for Better Education, Inc., the Frankfort Independent School District, the Warren County School District, and three citizens for a temporary injunction to block the new law.

The Council, a Kentucky coalition of school districts, and others filed a lawsuit June 7 to challenge the scholarship tax credit component of the new school choice law approved by the Republican-led legislature this year.

The case filed against the Kentucky Department of Revenue challenges the constitutionality of the new law. The Council contends that if it goes into effect, about $125 million in state revenue will be funneled to private schools.

The law basically will allow the use of education opportunity accounts, a type of scholarship, for students to attend out-of-district public schools or obtain educational materials and supplies. For students in some of the state’s largest counties, the scholarship funds could be used for private school tuition.

Individuals or businesses who donate to organizations that issue education opportunity accounts will be eligible for a tax credit. Shepherd noted that tax credits for donations may not be ready until next year.

“Spending money on voucher programs means denying students the opportunities they deserve in their neighborhood public schools because vouchers steal away scarce funding from public schools and give it to private schools that have no accountability or transparency, “ Council officials said in a news release earlier this month.

The Kentucky General Assembly overrode Gov. Andy Beshear’s veto of the bill March 29.

“Left unchallenged, over the next five years HB 563 will cost the taxpayers of the Commonwealth $125 million in revenue that should have gone to public education,” Council officials said.

The Council was formed in 1984 and brought the lawsuit that culminated in the historic Rose v. CBE ruling on Kentucky’s constitutional education obligations. The ruling led to major changes in Kentucky public education.

The new law requires each district to develop a policy about accepting students who don’t live in the district so that schools would be “without borders” and students could get benefits not offered in their own school district.

The creation of an education opportunity account program would allow students who are residents of counties with a population of 90,000 or more — including Fayette — to use funds received through the program for tuition and fees to attend nonpublic schools. An individual or an employee could get a tax credit for donating to an account.

On June 9, the Institute for Justice moved to intervene in the lawsuit on behalf of Florence, Kentucky, parent Akia McNeary and Newport, Kentucky, great-grandparent Nancy Deaton to defend the new school choice program, the Education Opportunity Account program.

The Institute is an advocate for school choice winning 24 school choice litigation fights, including three at the U.S. Supreme Court, the most recent of which was the landmark decision Espinoza v. Montana Department of Revenue in 2020, a news release from that group said.

“The lawsuit ignores the fact that the EOA Program is funded by private donations, not public dollars; that it funds families, rather than schools; and that the General Assembly has the constitutional power to provide for greater educational opportunity for Kentucky’s schoolchildren,” the news release said

Judge Shepherd said he will allow Attorney General Daniel Cameron and some parents to intervene in the lawsuit to defend the new law.

The Council maintains that the Kentucky Constitution demands that public funds be used to improve public schools in Kentucky and prohibits public money being shifted to private schools.

The General Assembly has an obligation to provide for and oversee an efficient system of common schools and cannot redirect public funds to private schools that serve a select few. The Constitution requires any programs that fund schools other than the common schools be approved by Kentucky voters, Council officials say, and House Bill 563 violates those constitutional requirements.

The law allows state revenue “to flow to private schools that are not subject to any education standards and are free to discriminate against students for any reason, including race, gender, sexual orientation, disability and religion. Public dollars should never be spent to create an education system that allows, encourages or perpetuates discrimination,” Council officials have said.

Kentucky Education Association President Eddie Campbell said earlier this month that his group supports the lawsuit.

“The General Assembly has tried to conceal HB 563’s constitutional defects by funding it through tax handouts to wealthy donors and allowing private management organizations — in exchange for a generous fee — to set up a publicly-funded education system that operates outside the common schools,” Campbell said.

“Bad legislation like HB563 is not policy taxpayers of Kentucky need from their legislature. Public dollars should never be spent to create an education system that allows, encourages, or perpetuates discrimination, he said.

Michelle Grimes Jones, parent and former Frankfort school board member, Katherine Walker-Payne, a Jefferson County parent, and Chris Rasheed , a Jefferson County teacher and parent, are all also named as plaintiffs.

Kentucky’s Education Opportunity Account Program is constitutional and will empower families to choose the best education for their child, IJ Senior Attorney Michael Bindas had said. “The lawsuit challenging the program is nothing more than an attempt by the education establishment to deny greater alternatives and opportunity to Kentucky children.”