The Privatization Push: Analyzing Tennessee's Education Scholarship Act of 2024 and its Legal Challenges

Southern legislators are reforming education more drastically in the past decade than ever before. Southern states have overhauled the education system, from banning critical race theory to proliferating bans on books that question America's ethnocentric appeal to the world. Specifically, Southern legislatures have rapidly begun to revitalize education through the lens of modern Republicanism. This has led to the vitality of America’s public school model with the creation of public charter schools and private school vouchers. Tennessee has been a marquee leader in the South in the fight to privately financialize the education system while masquerading it as giving poor parents a choice in their child’s education. Tennessee Governor Bill Lee unveiled the Education Scholarship Act of 2024 to Tennessee lawmakers earlier this year. The proposed legislation is an expansion of the Educational Savings Account Act, which is a pilot program that served three majority African-American counties: Shelby, Davidson, and Hamilton. 

Governor Lee’s proposal will expand private school vouchers to all 95 counties across Tennessee to low-income families who are at or below 300 percent of the federal poverty line, have a disability, or are eligible for the existing Educational Savings Account (ESA) pilot program [1]. According to the Tennessee Department of Education, the eligibility requirement for the existing ESA program is that the child must be zoned to attend the Achievement School District, Hamilton County Schools (Chattanooga), Memphis-Shelby County Schools, and Metro Nashville Public Schools. In addition, the child’s family's annual household income can exceed twice the limit for federal free lunch [2]. Most recently, the constitutionality of Governor Lee’s proposed legislation has come under scrutiny from public school advocates and interest groups like the ACLU-TN and the NAACP. Through this analysis, it becomes evident that the proposed Tennessee Education Scholarship Act of 2024, while positioned as a means to enhance educational choice and opportunity, risks contravening fundamental principles of equitable public education as enshrined in the Tennessee Constitution. By scrutinizing the implications of this act through the lenses of the Home Rule Amendment and the Education Clause, this essay aims to underscore the potential adverse effects on public school funding and local governance autonomy. 

Tennessee counties and localities are governed under Dillon’s Rule. Dillon’s Rule allows localities and municipalities to govern themselves in their interests as long as the state constitution grants them that authority. Dillon’s Rule is the impetus for creating city councils and school boards across Tennessee, where decision-making is more localized. In the context of private school vouchers, the existence of Dillon’s Rule in Article Eleven, Section Nine of the Tennessee Constitution was used in the Metropolitan Government of Nashville and Davidson County et al. v. Tennessee Department of Education et al. The Tennessee legislature enacted House Bill 0433 and Senate Bill 0012, establishing the Tennessee Education Savings Account Pilot Program [3]. 

The Education Savings Account Act is a pilot test for the Tennessee school voucher program intended to extend statewide contingent upon the successes of the voucher program in Shelby, Davidson, and Hamilton counties. Nashville-Davidson County and Shelby County governments sued the Tennessee Department of Education, citing that the school voucher program violated home rules. Chief Justice Roger Page delivered the majority opinion, joined by Justices Bivins and Frierson II. The Court held that the school voucher program was constitutional and did not violate the home rule because the Education Savings Account did not implicate the Home Rule Amendment. They further concluded that the Home Rule Amendment did not apply to this case because the Act dealt specifically with the school districts and not the county governments that fund public schools. Moreover, the Court ruled that the school districts could not adequately show the fiscal impact that school vouchers would have on school districts’ budgets [4]. 

The Supreme Court of Tennessee is wrong in its assertion because school districts in Tennessee are components of the county government. School districts go before their respective county commissions or city councils, in the case of Metro-Nashville, to request funding every fiscal year from the county. County funding in most school districts’ budgets in Tennessee accounts for more than 60 percent of the entire school’s budget—even this includes contributions from state and federal sources as well as private donations from corporate entities. However, private school vouchers disrupt the per-pupil amount from the state’s funding formula for education to local school districts. Therefore, a school district’s ability to discharge the duties that they are obligated to perform, including but not limited to passing a balanced budget by the school board’s strategic vision in the wake of private school vouchers, will be diluted. If families take their children out of public schools and put them into private schools in the middle of the school year, a school’s budget will be affected next fiscal year because the per pupil amount allocated for the child will be sent to the private school. Therefore, this sudden shortfall in revenue to school districts will cause a ripple effect that will negatively impact students. For instance, low-income students who choose to stay in a traditional public school and that school is impacted by a mass exodus of students going to private school, then the students who remain at the public school will have fewer resources, including but not limited to after-school programs and tutoring opportunities. 

In the Metropolitan case, the State Attorney General’s office argued that the legislature did not intend to overstep the authority of local governments because the legislature would reimburse counties for lost funds incurred if families received private school vouchers. However, the legislature’s intent was clear as they wanted to overstep localities' ability to govern. The legislature only provided the wraparound funds to protect school districts under the ESA program for three fiscal years. As a result, it will lead counties to incur a loss in education funding because of private school vouchers after year three. Therefore, the passage of the ESA program was a private act against Memphis, Chattanooga, and Nashville, which was the impetus of the Home Rule Amendment in the first place. Applying this analysis to the proposed Tennessee Education Scholarship Act of 2024, the act will be a private act against all 95 counties in Tennessee because the legislature is imposing a law on localities that they have not agreed to or voted to support via referendum. It is unclear whether the state would provide wraparound funding to counties similar to how the state did under the ESA program. 

Lastly, the proposed Education Scholarship Act of 2024 can violate the Education Clause of the Tennessee Constitution. Article Eleven Section Twelve of the Tennessee Constitution instructs the legislature to support public education [5]. The Tennessee Appeals Court ruled in Southern Constructors Inc. Loudon County Board of Education 58 S.W.3D 706 (2001) that the power to arbitrate construction contract disputes is fairly implied from the authority in Tennessee’s home rule amendment. In 1997, the Loudon County Board of Education contracted Southern Constructors, Inc. (SCI) for school building additions and renovations. During construction, an SCI subcontractor caused damage to electrical equipment, leading to a power disruption and subsequent discovery of mold. The Board hired the contractors to remove the mold. A disruption arose when SCI claimed the Board lacked the authority to enter arbitration agreements. The court of appeals in the Metropolitan Government of Nashville and Davidson County case interpreted the decision in Southern Contractors as the state observed that the legislature has “plenary and exclusive authority” to provide for public schools. When applying the ruling in Southern Contractors to the legislature’s responsibility to provide for the “maintenance, support, and eligibility standards of a system of free public schools in Article Eleven Section Twelve of the Tennessee Constitution, a rational basis is constructed to prove that Tennessee’s rejection of federal funding is unconstitutional [6]. 

Furthermore, applying the analysis made earlier to the proposed Tennessee Educational Scholarship Act of 2024, another conflict arises regarding the Court of Appeal’s interpretation of the decision in Southern Contractors and Article Eleven Section Twelve of the Tennessee Constitution. An argument can also be made that the Tennessee Educational Scholarship Act violates the Education Clause because the legislature’s intent will be providing for the security and maintenance of private schools by enabling parents to take their child’s per-pupil amount, which is public funds, from public schools to pay for private school tuition. Therefore, this will be unconstitutional under the state constitution and will move away from the precedent established in Southern Contractors. Applying this to the analysis made earlier about home rule leads to the argument that the legislature will be violating the precedent established in Southern Contractors because the state would pass an act that does not secure funding for public schools, thus leaving them vulnerable to being defunded. 

In closing, the evolution of education policy in Southern states, exemplified by Tennessee's push towards privatization through initiatives like the Education Scholarship Act of 2024, highlights a complex interplay between political ideology, constitutional principles, and educational priorities. While proponents argue for greater parental choice and revitalization of public education, critics raise valid concerns regarding the potential erosion of public school funding, local governance rights, and constitutional obligations to support public education. As legal battles continue and legislative debates unfold, it remains imperative to strike a balance that ensures equity, accountability, and the preservation of a robust public education system for all students across Tennessee and beyond.

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Bibliography

[1] Gov. Lee, Legislative Leadership Call for Statewide School Choice, Unveil Education Freedom Scholarship Act. (n.d.) 

[2] Tennessee Department of Education. (2021). “Education Savings Account Applications.” [3] White, “SENATE BILL 12 by Gardenhire HOUSE BILL 433.” 

[4] Page, “IN the SUPREME COURT of TENNESSEE at NASHVILLE METROPOLITAN GOVERNMENT of NASHVILLE and DAVIDSON COUNTY, et AL. V. TENNESSEE DEPARTMENT of EDUCATION” 

[5] Jackson, “The CONSTITUTION of the STATE of TENNESSEE.” 

[6] Bennett, “Metropolitan Government of Nashville and Davidson County, et Al. v. Tennessee Department of Education”