Skyrocketing Hope Scholarship price tag, now around $100M, a concern for WV lawmakers making budget

Yahoo

26-02-2025

A member of the West Virginia House Finance Committee looks at a copy of the proposed state budget on Feb. 13, 2025. (Perry Bennett | West Virginia Legislative Photography)
The price tag for the Hope Scholarship, the state's education savings account program, will double next year, climbing to more than $100 million. As budget concerns loom, lawmakers are questioning if the state can afford the program that is a hallmark of the Republican-heavy Legislature's education freedom push.
It's the largest funding increase requested by Gov. Patrick Morrisey in his first budget proposal.
'I believe, based on the information we have so far, which is preliminary, I think there should be a modification to it, but I don't know what it will be yet to what we're considering or what we're going to do,' said House Finance Chair Vernon Criss, R-Wood.
The Hope Scholarship, established in 2021, gives families roughly $4,400 per student in taxpayer money to use for private schools, homeschooling and more. There are limited guardrails on how funds can be used, and West Virginia families have used scholarship funds to pay for tuition at out-of-state schools, iPads, dance studio fees and more.
State Treasurer Larry Pack, who oversees the Hope Scholarship, requested around $100 million to pay for the program and expects to serve more than 19,000 students next year under its current eligibility rules. Program costs this year were around $52 million.
'Each year, more families enroll in the Hope Scholarship program empowering those parents to find the right education that fits their child's unique needs,' Pack said. 'My goal is to ensure that parents and families have the tools necessary to tailor an education for their children that works best for them.'
'The governor did not know the extent of Hope needs and funding until he assumed office,' said Eric Nelson, who Gov. Patrick Morrisey tapped to serve as revenue secretary to tackle the state's budget challenges. The Republican governor said former Gov. Jim Justice left him a projected $400 million deficit.
Morrisey, who requested a balanced budget in FY 2026, wants to use four different revenue streams to pay for the Hope Scholarship: $29 million in state funds, then a combination of two different lottery funds and a supplemental appropriation to add up to what his office says is a needed $110 million. Pack said the recommended supplementals were necessary for the program to continue to expand.
Senate Finance Chair Jason Barrett, R-Berkeley said the state would use one-time money to pay for the Hope Scholarship this year, adding, 'There is always money in lottery and excess lottery.'
Kelly Allen, director of the West Virginia Center on Budget and Policy, noted that the governor requested $170 million in one-time money to cover costs. 'A chunk of that is to fully fund Medicaid and the Hope Scholarship,' she said.
'When we look at the governor's proposed budget, nearly every agency and program sees a flat allocation compared to last year or reductions like in higher education,' Allen continued. 'The only program that sees significant growth in the governor's budget is the Hope Scholarship.'
House Speaker Roger Hanshaw has raised concerns about whether the state can afford the education savings account program. Del. John Williams, D-Monongalia, minority chair of the House Finance Committee, has the same apprehension.
'It's easy to campaign on these issues and talk about school choice. But when you increase your demands and pass tax decreases at the same time, eventually, that comes home to roost,' Williams said. 'It has now, and they're having trouble.'
Barrett felt confident in the state's plan to pay for the program.
'I think that the Legislature has made it very clear, based on what we've heard from the people across West Virginia, that very much want the Hope Scholarship,' he said. 'I think it's incumbent upon the Legislature now to honor the Hope Scholarship and do these things to make sure that it is funded at 100%.'
Criss emphasized that lawmakers are in the early phases of hammering out the budget.
'We don't know what the Senate is going to do. Obviously, we want to be prudent,' he said. 'We want to be able to do what the law says, but I believe that we're going to have to look at maybe some kind of a modification.'
House Democrats have proposed curtailing the use of Hope Scholarship funds at out-of-state schools after more than $257,000 was spent last year in 12 other states. Their bill, House Bill 2955, would require that schools receiving the Hope Scholarship must be located in West Virginia.
The Hope Scholarship will open up to all students to participate in the 2026-27 school year, and the Treasurer's Office estimates that an additional 30,000 to 40,000 students will be eligible. The program will have an estimated $300 million price tag.
Under Morrisey, the state has brought back six-year budget forecasts that went to the wayside under Justice.
Mike McKown, state budget director, said that, as of now, a projected budget gap for 2027 is right below $400 million. 'The big drivers are PEIA, Hope [Scholarship] and the school aid formula,' he said.
Williams said the state's plan to use one-time money for Hope Scholarship presents a challenge next year when the program cost more than doubles.
'The sky's the limit of how much it's going to be, and I think that's a real concern,' he said. 'I don't know what we're going to do next year.'
When asked if the governor's office would consider any changes or limits to the Hope Scholarship, Nelson said, 'We've been awfully busy at this time putting the budget together, the flood situation and putting a team in place. This and specific areas that may need addressed, like PEIA or future taxes, will be forthcoming. I feel confident that we have a great team.'
The multi-million dollar Hope Scholarship funding need comes as a wave of public schools are closing due to financial strain spurred by student population loss. Some students have exited public schools to use the Hope Scholarship.
A key education measure this session is meant to help elementary teachers remove disruptive and violent students, and the bill doesn't come with any funding to hire specially-trained staff or to build needed alternative learning schools for suspended students.
'We hear from lawmakers all the time there's no more money to fund behavioral support specials or interventionists,' Allen said, adding that Morrisey figuring out how to pay for the Hope Scholarship showed that money was available.
'Knowing that we haven't done our due diligence in our free public schools is really concerning,' she said.
SUPPORT: YOU MAKE OUR WORK POSSIBLE