Is PEP money coming from the government? (Also, a side-note on why PEP students cannot receive free classes at public schools.)

Short answer: no.

It is coming as a Florida Tax Credit Scholarship. Corporations in the state of Florida are required to pay taxes. For the FTC program, they've diverted that money, donating that same amount of tax dollars to SFOs (scholarship funding organizations) instead.

So technically, it's not government money--it's diverted money that never went to the government, and was diverted to the scholarship funding organizations instead, for those corporate organizations who wanted to do that. The funds are paid into a 501(c)(3) and never go into the state treasury. These funds are now being made available to PEP students (in an amount comparable to what the government alots per year to students via the school system).

It is not taking any money from a public school budget, or private school benefit, or anything else--it's a completely separate pool of money.

Some parents have asked why PEP students will have to pay for public school classes, FLVS, etc., if this money isn't government money. In other words, why can't you receive the PEP scholarship, but still get the free public school classes as typical home education students do?

The answer is this:

If PEP students were given this money and also allowed to still take free classes at public schools, they would be getting twice as much money per child as every other child in the state (because other students do not have access to these PEP funds).

The purpose of not allowing both is to level the playing field for all students--so that no one group of students gets more advantages or benefits. This was how it was set up in legislation, for that reason.