LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 556 HLS 21RS 1029
Bill Text Version: RE-REENGROSSED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: May 21, 2021 1:23 PM Author: DEVILLIER
Dept./Agy.: Education
Subject: Education Savings Account Program Analyst: Garrett Ordner
SCHOOLS/CHOICE RR INCREASE GF EX See Note Page 1 of 2
Creates and provides for a program to provide state funding for the education of students not enrolled in public school
Proposed law creates the Education Savings Account (ESA) Program to be administered by the Department of Education
(LDE) in accordance with Board of Elementary and Secondary Education (BESE) rules. Rules must provide for eligibility,
audits, and LDE’s authority to deem students ineligible and to contract with nonprofit organizations for administration.
Requires LDE to allocate to each account annually the state’s per-pupil allocation as provided in the Minimum Foundation
Program (MFP) formula, and to develop a system for parents to direct account funds to participating schools. Provides that
funds must be used for qualified educational expenses; up to 50% of total funds deposited into the account in a school year
may roll over if unused; and that under certain circumstances, funds are returned to the state general fund. Provides for
student, school, and service provider eligibility. Requires the use of a nationally norm-referenced test or statewide
assessment in participating schools. Provides for reporting requirements by the LDE. Effective upon governor's signature.
EXPENDITURES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. INCREASE INCREASE INCREASE INCREASE INCREASE
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 SEE BELOW SEE BELOW SEE BELOW SEE BELOW $0
Annual Total
REVENUES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. $0 SEE BELOW SEE BELOW SEE BELOW SEE BELOW $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 SEE BELOW SEE BELOW SEE BELOW SEE BELOW $0
Annual Total $0 $0
EXPENDITURE EXPLANATION
There will be an increase in state expenditures to develop and fund the Education Savings Accounts (ESA) Program. The
Department of Education (LDE) anticipates program planning will cost $769,400 in FY 22, and program implementation will
cost $1,081,600 annually beginning in FY 23. There will be reduced MFP costs and increased costs to the ESA program by an
equivalent amount for students that leave public schools to participate in the program. State costs will increase to the extent
a student participates in the ESA program who would otherwise not have attended public school, however this is
indeterminable. Local school systems may experience reduced costs due to reduced enrollment.
Participants will receive funding equal to the state’s per-pupil allocation as provided in the Minimum Foundation Program
(MFP) formula, considering all student characteristics. According to the LDE, the current MFP average state per pupil
allocation is $5,545; however, amounts will vary by district.
The LDE assumes that 2,000 accounts will be opened in the first year of operation. Eligible students must be enrolled in a
public school or eligible to enroll in Kindergarten and meet one of three criteria: (1) the student has a parent or guardian in
active duty military service; (2) the student’s parent submitted an inter-district or intra-district transfer request during the
most recent transfer request period and was denied, or (3) the student is residing with a prospective or permanent
placement through foster care.
Outside of program administrative costs, there will be no additional costs to the state for students that participate in the ESA
program if they are already enrolled in public school. The LDE would reduce the MFP state per-pupil allocation and allocate
an equivalent amount per student to the ESA program. For illustrative purposes, if 2,000 students participate in the ESA
program, MFP costs will decrease by $11.1 M and deposits into ESAs will increase by $11.1 M. Local school systems may
experience reduced instructional costs due to a decrease in enrollment, however this is indeterminable.
EXPENDITURE EXPLANATION CONTINUED ON PAGE TWO
REVENUE EXPLANATION
There may be a decrease in MFP allocations to local school districts to the extent that the proposed legislation causes
students to attend nonpublic schools in lieu of public schools; however, the extent of such losses is indeterminable. The ESA
shall be closed and the funds in the account shall be returned to the state general fund if the student is determined to be no
longer eligible, if an account has been inactive for two consecutive years, or if a parent fails to comply with the provisions of
proposed law or state board rules pertaining to the program.
Senate Dual Referral Rules House
x 13.5.1 >= $100,000 Annual Fiscal Cost {S & H} x 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
13.5.2 >= $500,000 Annual Tax or Fee Alan M. Boxberger
6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Staff Director
 LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 556 HLS 21RS 1029
Bill Text Version: RE-REENGROSSED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: May 21, 2021 1:23 PM Author: DEVILLIER
Dept./Agy.: Education
Subject: Education Savings Account Program Analyst: Garrett Ordner
CONTINUED EXPLANATION from page one: Page 2 of 2
EXPENDITURE EXPLANATION CONTINUED FROM PAGE ONE
There will be increased state costs to the extent a student participates in the ESA program who would otherwise not have
attended public school; the number of such students is indeterminable. For illustrative purposes, there are an estimated
1,040 children 5 years of age whose parents are active-duty military members in Louisiana. According to the Military Child
Education Coalition’s Military Kids Now 2020 Survey, 18% of military children are homeschooled or attend private school. If
18% of the estimated 1,040 military children choose to participate in the ESA program, those 187 students would produce
an estimated state cost of $1 M (187 students x $5,545).
The proposed law allows LDE to administer the program directly or to contract with a non-profit organization for the
administration of the program or parts of the program. A similar program in Arizona, the Empowerment Scholarship Account
(ESA), employs 25 staff members to perform administrative functions such as the review and approval of applications,
program finance, and auditing. The Arizona ESA program serves approximately 9,700 students as of January 2021.
According to the LDE, program planning will cost $769,400 in FY 22, and program implementation will cost $1,081,600
annually beginning in FY 23. FY 22 expenses total $769,400, including funding for 8 positions ($520,300 in salaries and
$208,100 in related benefits), and $16,000 in operating expenses. LDE plans to contract with a vendor to process ESA
payments to providers. Based on the Arizona ESA program, this is anticipated to cost $25,000 in FY 22. Because the vendor
charges educational service providers a transaction fee, the LDE does not expect costs beyond the first year. FY 23 expenses
total $1,081,600, including funding for 12 positions ($755,400 in salaries and $302,200 in related benefits), and $24,000 in
operating expenses. Finally, LDE anticipates that as the number of participants grows, additional staff will be needed for
purposes of quality assurance and proper internal controls over public funds.
Senate Dual Referral Rules House
x 13.5.1 >= $100,000 Annual Fiscal Cost {S & H} x 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
13.5.2 >= $500,000 Annual Tax or Fee Alan M. Boxberger
6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Staff Director