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Future Costs of Idaho SB1038’s Universal Education Savings Accounts Projected to Rise Sharply

ALEJANDRA CERNA RIOS - FEBRUARY 20, 2023


Senate Bill 1038, which is before the Idaho Senate, would create a universal private education program. According to the bill’s fiscal note, in its first year (FY2024) Freedom in Education Savings Accounts (ESA’s) would cost the state about $44 million in Fiscal Year 2024 by serving about 6,600 Idaho students and providing administrative funds for the new program.


In Fiscal Year 2025 and beyond, the potential cost to Idaho taxpayers from SB 1038 is $363.8 million. Estimates of the future cost of this program at the state level were made using enrollments rates based on studies conducted of similar existing programs in Florida and Arizona (Table 2). Cost estimates were then calculated assuming a $5,950 amount per FIE account, as reflected in SB 1038’s fiscal note.


Universal ESA Programs Primarily Benefit Wealthier Households


In a study of Arizona’s ESA program enrollment data, Grand Canyon Institute found that the accounts primarily benefit wealthier families. The program – named Empowerment Scholarship Accounts – was recently made universal after one year of a smaller scale program. After the change to universal, the Institute found that about 45 percent of ESA applications came from zip codes in Arizona with a median household income of $80,000 or more, which is about 30 percent higher than the state’s median income of about $61,000. Less than one-third of applicants came from zip codes below the state’s median income. The study also found no link between applications and public school districts with relatively lower performance results. As a result, the primary beneficiaries of Arizona’s universal ESA policy are wealthier families with existing access to quality education.

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