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Committee splits on oversight of Children’s Scholarship Fund; some senators want state control
Summary
The Senate Education Committee debated whether the Children’s Scholarship Fund and Education Tax Credit program should be moved from a nonprofit administrator to the Department of Education amid concerns over administrative fees, interest on held funds and documentation.
The Senate Education Committee spent significant time debating oversight and administration of the Children’s Scholarship Fund and the Education Tax Credit program after members raised concerns about administrative fees, financial transparency and who benefits from interest on deposited funds.
One senator urged moving administration of the scholarship program into the Department of Education to improve state oversight and ensure public accountability for funds that originate in the education trust. Committee members discussed whether the charitable nonprofit currently administering parts of the program has repeatedly resisted providing detailed financial documentation; members said the Legislative Budget Assistant has been involved but that more transparency is needed.
Specific financial concerns raised in the hearing included the program's reported administrative fee (previously described by the nonprofit's representatives as approximately 8% in recent years, compared with an initial 10% fee), and the practice of third‑party vendors holding account balances that may earn interest. One senator said money sitting in a "class wallet" program can earn interest that accrues to private vendors rather than to the state; committee members asked why interest on public funds was not retained by the state. Members noted the nonprofit has undertaken digital and print outreach that increases program participation and therefore administrative revenues.
The bill under discussion would have required the Department of Education to administer the program. Supporters argued a state agency should manage the program because it affects the state education trust fund and because in‑house administration would allow state oversight of administrative costs and program growth. Opponents said the Department of Education had previously declined to operate the program and that further conversations with DOE leadership are needed before a transition. Several senators said they will pursue enhanced oversight through the Legislative Budget Assistant and the oversight commission already established by statute.
At the conclusion of debate the committee recorded a motion consistent with Inexpedient to Legislate (ITL) on the administration change (transcript shows a recorded committee vote of 3‑2 in favor of ITL). Committee members asked staff to continue oversight work, pursue documentation from the nonprofit administrator and to consider whether a state‑run model is feasible with the Department of Education.
