Senate Education Committee opens debate on S.62, K-12 education lottery scholarship bill

Senate Education Committee members met for an informational session to begin discussion of S.62, the K-12 education lottery scholarship bill, but did not take any votes. The committee chair said the goal is to move the measure quickly to the Senate floor, possibly in the first week of session, and called staff to summarize the litigation and the bill’s proposed changes.

The committee staff research director, Donna Barton, told members the bill was drafted in response to a South Carolina Supreme Court challenge (filed Sept. 11, 2024) to the Education Scholarship Trust Fund (ESTF). Barton said the court’s majority concluded the ESTF “was not a true trust fund and therefore it maintained its public fund nature” and struck portions of the act that would have benefited independent schools. Barton summarized the draft S.62 as rewriting the ESTF structure to address those concerns by changing the funding source and tightening certain provisions.

Why it matters: committee members said the issue is urgent because families and students are already enrolled in programs affected by the court ruling and face uncertainty. The bill’s sponsors say S.62 is intended to remove constitutional questions identified by the court while preserving support for eligible students.

Major elements summarized by staff

• Funding shift: Barton said S.62 directs appropriations to a K‑12 education lottery scholarship account and directs the treasurer to transfer money from the South Carolina Education Lottery account to the Department of Education scholarship fund rather than relying on the ESTF as originally structured. Barton said the change is intended to avoid the constitutional problem the court identified while not cutting existing lottery-funded programs.

• Eligibility and amounts: the draft would reset the scholarship amount to the state’s average state per-pupil funding for the prior year (staff cited roughly $8,800 as a recent state-per-pupil figure) instead of the ESTF’s prior flat $6,000 figure. The bill phases eligibility upward from 200% of federal poverty in year one up to 600% of federal poverty by the third year; staff said the 600% example equates to about $187,000 for a family of four as discussed in committee.

• Limits and prioritization: staff said the program would be capped at 15,000 students (about 2% of K‑12 enrollment in South Carolina) and that students already in the program would receive priority under a rolling application process.

• Eligible expenses and accountability: Barton said eligible uses would be broadened to include uniforms and inter-district transfer fees, and would preserve testing/accountability language used previously — for example, requiring participating students to take state tests or an approved nationally normed test with a linkage study. Barton said schools could be removed from the approved list by the Department of Education if accountability standards are not met.

• Interdistrict transfers: the bill would require the Department of Education to create a model interdistrict transfer policy within 120 days; all school districts would be required to enact a policy consistent with the model.

Questions and concerns raised in committee

Members pressed several questions about constitutionality, fiscal impacts, and scope. One long critique from a committee member identified in the transcript as Senator (Lawrenceburg) argued that the proposal, particularly the phase-up to 600% of poverty, would extend taxpayer subsidies to many higher-income families and private schools, and could redirect hundreds of millions of dollars away from public-school priorities if uptake rose beyond initial projections. That senator said, “At 600% of poverty, a family of 4 is making $187,000 a year… we are basically… subsidizing every private school in this state.”

Other senators asked about the effect on lottery-funded college scholarships, the practical flow of funds from the lottery account to the scholarship account, and whether the change would require rescinding or reallocating existing lottery expenditures. Staff repeatedly said the change is largely an accounting and appropriation-path adjustment and that the General Assembly would continue to set appropriation levels; staff also noted the lottery has many different expenditures and that some current lottery-funded items could be covered through the general fund if needed.

Committee members also asked whether the bill would allow virtual providers or online programs to receive scholarship funds. Barton said eligible expenses include tuition and fees for approved education service providers, including some online providers, and that the current code already allows approved virtual providers (with department approval) to participate.

Procedure and next steps

The committee chair said the meeting was informational and that no votes would be taken at this session. The chair indicated the intention to bring S.62 to the Senate floor early in the session and said members should be prepared to offer and debate amendments there. Staff noted the subcommittee has collected an extensive public-comment record and is working to post those materials online for members to review before floor action. Barton also identified draft statutory changes that were made to respond to the court’s majority opinion, including removing certain anti‑discrimination and “belt‑and‑suspenders” language that the majority had cited as problematic.

The session closed with the chair reiterating the plan to continue discussion when the full Senate convenes and with staff directed to provide requested data (including a breakdown of current enrollments in virtual providers and additional revenue-per-pupil details).

Ending: committee members agreed to continue the debate once the session begins; staff will post public comments and provide additional data to members ahead of floor consideration.