Senate Education advances bill to change charter-school credit-enhancement formula, lift cap

The Senate Education Committee voted to send House Bill 331 to the Senate floor with a due-pass recommendation after a presentation from its sponsor and testimony from charter-school leaders and lenders.

State Senator Lori Denhartauge (District 22) told the committee the bill replaces the existing formula that determines program capacity and lifts the prior cap so more public charter schools can use the credit-enhancement tool administered alongside the Charter School Revolving Loan Fund. Denhartauge said the statutory transfer into the revolving loan fund already occurred and that the change does not require new appropriations; it revises how program capacity is calculated.

Witnesses described how the credit-enhancement program lowers borrowing costs and frees local resources for classrooms. Monica White, CEO and co‑founder of Elevate Academy, said in the current market Elevate budgets about $18,000,000 to purchase land and build each campus and that without the credit enhancement financing at an estimated 7% interest would produce approximately $865,000 in annual interest on that debt. "Being able to access the credit enhancement program would decrease our interest rate to 5%...decrease our annual interest payments to $567,000 or by $289,000 each year," White said. She added that if three Elevate campuses access the program, the schools would save about $850,000 per year and more than $30,000,000 over 35 years.

Emily Downey, chief financial officer for Sage International Charter Schools, described past savings from the program: her Boise campus saved about $119,000 per year when it refinanced and the Middleton campus savings were roughly $239,000 annually after purchase and construction. Terry Ryan, CEO of Bloom, and Robin Odlin, president of Building Hope Finance, described the program as a critical source of lower-cost capital that enables school creation and refinancing. Blake Yood of the Idaho Charter School Network described the revised formula and said the state worked with the treasurer’s office and rating agencies to design limits; he compared Idaho’s proposed structure with more liberal programs in Colorado and Utah and said the revised approach remains conservative.

Sponsor Denhartauge told the committee the bill directs the Idaho Housing and Finance Association to evaluate portfolio debt-service capacity and set the program’s maximum aggregate annual debt service; she cited current program figures presented to the committee, including a current maximum aggregate annual debt service of about $11,400,000 and a Charter School Facilities Fund balance the sponsor described as $1,100,000, with additional transfers scheduled that, as testified, could increase program capacity substantially.

After questions about fiscal exposure, defaults and program safeguards, the committee voted to send House Bill 331 to the floor with a due-pass recommendation. The motion was moved by Senator Jen Hartog and seconded (second not specified in the record). The committee recorded a voice vote; the chair announced the motion carried.

Committee members and witnesses emphasized the program’s safeguards — deposit requirements, intercept of state school payments and other underwriting criteria — and noted no charter-school defaults under the program had been reported to date.