Wyoming ESA Program

# Wyoming's Steamboat Legacy Scholarship: A Constitutional Collision on the Frontier of School Choice

Section I: Introduction: The Frontier of Universal Choice in Wyoming

The American K-12 education landscape is undergoing a period of profound and rapid transformation, characterized by the legislative proliferation of private school choice policies. Central to this movement is the ascendance of the Education Savings Account (ESA) as the predominant policy vehicle. In early 2025, Wyoming entered this dynamic national arena, becoming the 16th state to enact a universal or near-universal school choice program with the passage of the Steamboat Legacy Scholarship Act.1 This legislative action positioned Wyoming at the forefront of a significant national policy trend, aiming to empower families with public funds to customize their children's education outside the traditional public school system.

This report provides a comprehensive analysis of Wyoming's ambitious leap into universal school choice. The central narrative is one of a fundamental collision between legislative intent and constitutional constraints. The program's design reflects a strong political desire for parental empowerment and educational freedom, mirroring a model that has gained prominence across the country. However, its implementation was immediately and decisively halted by a legal challenge that questions its very legitimacy under the unique provisions of the Wyoming Constitution. The program's story is therefore not one of operational outcomes or fiscal impacts, but of a policy brought to a standstill at its inception, defined entirely by the constitutional crucible it now faces.

The timeline of these events is remarkably compressed and contentious. The state's initial foray into ESAs was a modest, means-tested program enacted in 2024\.3 Within a single year, this was radically expanded into a universal entitlement for all K-12 students through the 2025 Steamboat Legacy Scholarship Act.1 This rapid and expansive policy shift appears to have been the primary catalyst for the fierce legal opposition that followed. The move to universality transformed the program from a niche policy into what opponents viewed as a systemic threat to the state's public education framework. A lawsuit was filed in June 2025, just months after the universal expansion was signed into law, and a court-ordered injunction halted the program before the first funds could be disbursed in July 2025\.6 This sequence suggests that the speed and scale of the legislative action directly precipitated the speed and severity of the judicial reaction, forcing an immediate and fundamental constitutional confrontation.

This report will deconstruct this collision in detail. It will begin by tracing the program's legislative architecture, from its targeted pilot phase to its universal mandate. It will then document the administrative rollout and the powerful evidence of public demand that emerged before the program was enjoined. The core of the analysis will be a deep dive into the constitutional challenge, Wyoming Education Association v. Degenfelder, examining the specific legal arguments and court rulings that have defined the program's fate to date. Finally, the report will conclude with a comparative analysis, using the nation's most mature universal ESA program in Arizona as a framework to understand the critical fiscal, equity, and accountability questions that await Wyoming, should its program ever emerge from its current legal limbo.

Section II: Legislative Architecture: From Targeted Pilot to Universal Mandate

The legal and financial framework of Wyoming's ESA program underwent a dramatic and rapid transformation in just twelve months. This evolution from a limited, means-tested pilot program into a broad, universal entitlement is central to understanding the political dynamics and the subsequent constitutional challenge. The legislative record reveals a deliberate and significant policy shift that, while celebrated by proponents, was viewed with constitutional skepticism even as it was being debated.

The Genesis: The 2024 Wyoming Education Savings Accounts Act (HB0019)

Wyoming's initial entry into the ESA landscape was the Wyoming Education Savings Accounts Act, signed into law on March 21, 2024\.4 This first iteration of the program, established by House Bill 19, was a targeted intervention designed as a cautious first step. Eligibility was strictly means-tested, limited to Wyoming families with a household income at or below 250% of the federal poverty level.3 The annual award amount for each eligible student was set at $5,000.3

This initial design was praised by school choice advocates, including State Superintendent of Public Instruction Megan Degenfelder, who described it as an "important first step" toward empowering families with more educational options.4 The program was scheduled to begin serving students in the 2025-26 school year, establishing a foundation for what would soon become a much larger and more contentious policy debate.4

The Transformation: The 2025 Steamboat Legacy Scholarship Act (HB0199)

In the 2025 legislative session, lawmakers moved to radically expand the nascent program through House Bill 199, the Steamboat Legacy Scholarship Act.5 This legislation did not merely amend the 2024 law; it fundamentally transformed its scope, scale, and purpose.

First, the act officially rebranded the program as the "Wyoming Education Savings Accounts Steamboat Legacy Scholarship Act," creating a distinct identity for the expanded version.5 The most critical change was the expansion of eligibility. The 2025 law eliminated the income cap entirely for K-12 students, making the program universally available to all Wyoming residents in those grades.1 Eligibility for pre-kindergarten students was retained but remained means-tested, with the income threshold set at or below 250% of the federal poverty guidelines, which translated to approximately $80,375 for a family of four.1

To accompany this expanded eligibility, the annual scholarship value was increased by 40%, from $5,000 to $7,000 per student, to be disbursed in quarterly installments into a parent-managed account.1 The program's funding mechanism was also solidified. The legislature made a one-time, direct appropriation of $30 million from the state's General Fund to a newly created "Steamboat Legacy Scholarship Program Account".1 This fixed appropriation created a de facto enrollment cap. Allowing for up to 5% of the total for administrative costs leaves $28.5 million for scholarships, which, at $7,000 per student, means the program can serve a maximum of approximately 4,071 students.1 The legislation also specified that any unencumbered funds in the dedicated account at the end of a fiscal year would not revert to the General Fund but would remain available for future scholarships.5

The law provides families with significant flexibility, a hallmark of modern ESA design. Allowable expenses include a broad array of educational goods and services, such as private school tuition and fees, private tutoring, textbooks and curriculum, educational therapies, non-governmental online learning programs, fees for standardized tests, transportation to an education provider, and even tuition for college or technical school courses.1

In exchange for this flexibility, the law establishes several accountability requirements. Parents must sign an agreement with the Wyoming Department of Education (WDE) certifying that their child is not enrolled in a public school.1 They must also ensure that their child receives instruction in a set of core academic subjects: reading, writing, mathematics, civics (including the U.S. and Wyoming constitutions), history, literature, and science.1 To measure academic progress, participating students are required to take either the statewide assessment or a nationally norm-referenced achievement test.1

The legislative process that produced this transformation was highly contentious. The bill was subjected to 26 different amendments, 11 of which passed, signaling a significant level of debate and modification.16 More importantly, the constitutional questions that would later form the basis of the lawsuit were raised explicitly by lawmakers during the session. Opponents of the program, including the Wyoming Education Association (WEA), have pointed out that legislators were warned from the beginning about the bill's potential unconstitutionality.7 Senator Charles Scott, for example, was noted as having questioned whether the bill was constitutionally defensible.7 This context suggests that the subsequent legal challenge was not an unforeseen consequence but a predicted outcome of a calculated political risk. The legislative record indicates that proponents made a conscious decision to advance a legally vulnerable bill, effectively daring opponents to challenge it in court and setting the stage for the immediate constitutional confrontation that followed.

#### Table 1: Comparative Analysis of Wyoming ESA Legislation (2024 vs. 2025\)

Section III: Implementation and Demand: A Program Halted at the Starting Gate

Following the passage of the Steamboat Legacy Scholarship Act in March 2025, the Wyoming Department of Education (WDE) moved swiftly to construct the administrative infrastructure necessary to launch the program for the 2025-26 school year. This brief period of implementation, before being halted by court order, revealed both the state's capacity to stand up a complex new program and, more significantly, a powerful and immediate level of public demand from Wyoming families.

Administrative Rollout

The responsibility for administering the program fell to the WDE, led by State Superintendent Megan Degenfelder, a vocal proponent of the policy.6 The department took several key steps to build the program's operational framework. It created and filled two new, dedicated positions: an ESA Program Manager and an ESA Finance Manager, bringing in individuals with experience in school administration and education finance to oversee the day-to-day operations.9

Recognizing the complexity of managing thousands of individual family accounts and processing payments to a wide variety of vendors, the WDE followed a common practice among states with ESA programs and issued a Request for Proposal (RFP) for a third-party financial services platform. The state selected Odyssey, a technology vendor that specializes in administering ESA programs, to provide the online portal for applications and financial management.9 This platform was intended to streamline the process for both families and providers while incorporating safeguards against fraud and misuse.9

The WDE laid out a clear timeline for launch. The application for Education Service Providers (ESPs)—the schools, tutors, and other vendors seeking to be paid with ESA funds—opened on April 1, 2025\.6 The application for families was designed as a two-phase process. Phase one began on January 1, 2025, allowing families to submit basic information to signal their interest, followed by a second phase in April where they could submit the required documentation, such as birth certificates and proof of residency, to verify eligibility.4 The first quarterly disbursement of funds was scheduled for July 2025\.4

Evidence of Latent Demand

The public response to the opening of the application window was immediate and overwhelming, providing clear evidence of significant latent demand for educational alternatives in Wyoming. Within the first two weeks after applications opened in May, the WDE had already received 3,484 student applications.17 This number continued to climb rapidly, with officials and news reports soon citing figures of 3,818 and "nearly 4,000" applications.8

This surge in applications is a critically important data point. The program's $30 million appropriation effectively capped participation at approximately 4,071 students.12 The fact that applications approached this maximum capacity almost immediately demonstrated that the program was not a niche policy for a small subset of families but one that resonated with a broad and motivated constituency across the state.

The strength of this demand has since become a central piece of evidence in the political and legal battle over the program's future. For proponents, the application numbers serve to personify the impact of the court's injunction. Superintendent Degenfelder argued that halting the program was "devastating to the nearly 4,000 Wyoming families that have signed up for the program and the many service providers that are counting on those families".18 This framing casts the legal challenge not as an abstract constitutional debate but as an action that directly harms thousands of specific Wyoming children and families who had made plans based on the new law.

Conversely, for opponents, the same data underscores the scale and urgency of the constitutional threat they sought to prevent. The nearly 4,000 applications represent the imminent diversion of the full $30 million appropriation from the public treasury to a program they contend is unconstitutional. From this perspective, the injunction was necessary to prevent the "irreparable injury" of this large-scale transfer of public funds before the court could rule on the program's legality.20 The application data, therefore, is more than a simple measure of public interest; it has been weaponized by both sides as a powerful proxy for the high stakes of the legal fight, quantifying either the human cost of the delay or the fiscal scale of the alleged constitutional breach.

Section IV: The Constitutional Crucible: *Wyoming Education Association v. Degenfelder*

The defining feature of the Steamboat Legacy Scholarship Program to date is not its operation but its litigation. The program's ambitious design ran headlong into a formidable legal challenge that has, for the time being, rendered it inert. A detailed examination of this case is essential to understanding the program's current status and the unique constitutional landscape for school choice in Wyoming.

The Lawsuit

The legal challenge, officially captioned Wyoming Education Association, et al. v. Megan Degenfelder, et al., was filed on June 13, 2025, in the Laramie County District Court.1 The plaintiffs represent a coalition of public education advocates, including the Wyoming Education Association (WEA), along with individual public school parents, teachers, and taxpayers.20 The lawsuit names the State of Wyoming, the State Superintendent of Public Instruction, and the State Treasurer as defendants.20 In response, pro-school choice legal organizations, EdChoice and the Institute for Justice, filed a motion to intervene in the case on behalf of Wyoming families who had applied for the program, seeking to defend its constitutionality.21

Core Constitutional Arguments of the Plaintiffs

The plaintiffs' case is built on the assertion that the ESA program violates multiple, specific provisions of the Wyoming Constitution. Their arguments are not generic but are tailored to the unique language of the state's founding document.

1. Article 7, Section 1: The Uniformity Clause. The central pillar of the plaintiffs' argument is that the program violates the legislature's duty to provide for the "establishment and maintenance of a complete and uniform system of public instruction, equally open to all." They contend that the ESA program creates a separate, parallel system of education that is, by its nature, not uniform with the public system. Furthermore, they argue it is not "equally open to all" because the private schools and providers that receive ESA funds are not required to accept all students and can deny admission for various reasons, including to students with disabilities.20

2. Article 16, Section 6: The State Control Clause. The second major claim is that the program constitutes an illegal appropriation of public funds to private entities. This argument invokes the constitutional prohibition that the state shall not "make any donation or grant... to any individual, association or corporation." The plaintiffs assert that the $30 million appropriation flows directly to private individuals (parents) and corporations (private schools) that are not under the "absolute control of the State," thereby violating this provision.20

3. Article 3, Section 36: The Sectarian Aid Clause. The lawsuit also raises the argument that the program violates the state's prohibition on funding religious institutions. This clause states, "No money of the state shall ever be given or appropriated to any sectarian or religious society or institution." Given that many private schools are religious, the plaintiffs argue that the use of ESA funds for tuition at these schools constitutes an unconstitutional appropriation of state money to sectarian institutions.7

The Court's Rulings and Current Status

The plaintiffs moved for a preliminary injunction to halt the program before it could disburse funds on July 1, 2025\. Laramie County District Court Judge Peter Froelicher granted this request, effectively freezing the program.7 In his ruling, the judge found that the plaintiffs were likely to succeed on the merits of their first two claims—those based on the Uniformity Clause and the State Control Clause.20 The judge's reasoning explicitly noted that the program would cause "irreparable injury" to the plaintiffs by diverting $30 million in public funds. He also characterized the program's funding mechanism—passing money through the State Superintendent to parents—as a transparent attempt to "circumvent the prohibition on giving public funds for educational purposes to private persons, private entities, and sectarian institutions".7

The State of Wyoming immediately appealed the injunction to the Wyoming Supreme Court and requested a stay of the order, which would have allowed the program to operate while the appeal proceeded.20 On October 7, 2025, the Wyoming Supreme Court denied the state's request for a stay.6 As a result, the preliminary injunction remains in full force, and the Steamboat Legacy Scholarship Program is legally blocked and non-operational. The underlying case continues at the district court level, where Judge Froelicher has also denied the state's motion to dismiss the lawsuit, allowing it to proceed on its merits.16

The legal arguments succeeding in Wyoming appear to be rooted in more fundamental, structural aspects of the state constitution than similar challenges in other states. For instance, Arizona's ESA program was specifically engineered as a legal workaround to a constitutional clause that forbade the direct payment of state funds to religious schools.2 By funding parents instead of institutions, the program survived judicial scrutiny. The Wyoming court's reasoning, however, seems to look past this technical distinction. The judge's pointed comment about the legislature's attempt to "circumvent the prohibition" suggests a focus on the ultimate effect of the appropriation, not just its mechanical pathway.

Furthermore, the strength of the "uniform system of public instruction" argument points to a more formidable constitutional barrier. This clause is a positive mandate requiring the legislature to provide a specific type of education system. The court's preliminary acceptance of the argument that creating a parallel, non-uniform private system violates this mandate is a powerful and potentially expansive interpretation. This suggests that the legal problem in Wyoming may not be one that can be solved with a simple tweak to the funding mechanism. The state faces a foundational constitutional conflict, pitting the legislature's desire for educational pluralism against the constitution's apparent mandate for a single, uniform system of public instruction under the absolute control of the state.

#### Table 2: Key Arguments and Rulings in WEA v. Degenfelder

Section V: Concluding Analysis: Wyoming's ESA in a National Context

Wyoming's Steamboat Legacy Scholarship Program is currently defined by a single, dispositive question: its constitutionality. The ongoing legal battle has prevented the collection of any operational data, leaving critical questions about the program's potential impact unanswered. However, the experiences of more mature universal ESA programs, particularly Arizona's, provide a clear and predictable roadmap of the fiscal, equity, and accountability challenges that would immediately confront Wyoming should the program survive its legal challenge. The state's current legal pause offers a unique, if unintended, opportunity for policymakers to learn from these precedents and proactively design a more transparent and accountable program.

The Inevitable Fiscal Debate: Switchers and Net Cost

While Wyoming's program begins with a fixed $30 million gross cost, any future continuation or expansion would inevitably ignite a debate over its net fiscal impact. The experience in Arizona demonstrates that this debate hinges almost entirely on a single metric: the "switcher rate," or the percentage of ESA participants who previously attended a public school.2 In Arizona, a rising switcher rate (reaching 57% by 2025\) allows proponents to argue that the program generates substantial savings for the state by moving students from a more expensive public system to a less expensive ESA, potentially making the program revenue-neutral or even a net savings.2 Conversely, critics focus on the cost of "non-switchers"—students who were already in private or homeschool settings—arguing that every dollar spent on them is a new drain on the state's general fund.2

Wyoming's enabling legislation for the Steamboat Legacy Scholarship Program does not require the WDE to collect or report data on a student's prior school enrollment. This is a critical design flaw. Without "switcher" data, it would be impossible to conduct an objective analysis of the program's net cost to the state, leaving the fiscal debate to be dominated by competing, unverifiable models. To avoid this, Wyoming policymakers should amend the law to mandate the collection and public reporting of prior enrollment status for all participants.

The Inevitable Equity Debate: Who Benefits?

A second, equally contentious debate would center on program equity: who is actually using the scholarships? Arizona's experience is again instructive. The Arizona Department of Education does not officially collect or report data on the income, race, or ethnicity of ESA participants.2 This official data vacuum has created a "battle of the models," where different research organizations use ZIP-code-level analysis to arrive at starkly different conclusions. One model finds the program is most heavily utilized by middle-income and rural families, while another concludes it is a "handout to the wealthy" that disproportionately benefits affluent suburban communities.2 This unresolved debate, fueled by a lack of official data, undermines public trust and makes evidence-based assessments of equity impossible.

Wyoming's law is similarly silent on the collection of demographic data for its universal K-12 cohort. This guarantees that the same polarized and unproductive debate over access and equity would erupt in Wyoming. To prevent this, the law should be amended to require the WDE to collect and publicly report anonymized, aggregated data on key participant demographics, such as household income and geographic location.

The Inevitable Accountability Debate: The Oversight Deficit

Finally, Arizona's journey provides a stark warning about the administrative challenges of scaling a universal ESA program. As Arizona's program grew from 12,000 to nearly 100,000 students, its administrative and oversight capacity failed to keep pace. The state's Department of Education was left with only twelve auditors to oversee the financial transactions of tens of thousands of individual accounts, leading to a reliance on auto-approving small purchases and documented instances of misspending.2 This "oversight deficit" has eroded public confidence and become a major political liability for the program.

Wyoming's law takes some initial steps toward accountability, allowing up to 5% of the appropriation ($1.5 million) for administration and requiring random audits of at least 2% of accounts.1 However, overseeing thousands of individual family purchasing decisions is a fundamentally different and more complex task than overseeing a few hundred school districts. Arizona's experience demonstrates that an administrative framework that is adequate for a small program can be quickly overwhelmed by the scale of a universal one. To ensure long-term integrity and public trust, Wyoming policymakers should ensure that funding for administration and the scope of auditing requirements are explicitly designed to scale proportionally with program enrollment.

In conclusion, while the future of the Steamboat Legacy Scholarship Program rests in the hands of the Wyoming courts, the path forward, should it be cleared, is already well-mapped by the states that have gone before. The predictable debates over net cost, participant equity, and financial oversight are not a matter of if, but when. The current legal injunction, while a setback for proponents, provides a crucial window of opportunity for policymakers to learn from these precedents and amend the program's enabling statute to build in the data transparency and scalable oversight mechanisms that are essential for any large-scale public investment. Doing so would not resolve the constitutional question, but it would ensure that if the program is allowed to proceed, it can be evaluated on a foundation of verifiable facts rather than competing narratives.

#### Works cited

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