Presenter: Idaho charter financing programs saved schools about $113 million so far, but demand has outstripped capacity

Matthew Joseph, a senior policy advisor with AccelinEd, told a legislative committee that Idaho’s combined approach to charter school facilities financing — a short-term no-interest revolving loan fund plus a moral-obligation credit enhancement for long-term financing — has produced roughly $113,000,000 in interest-cost savings for charter schools to date while costing the state “$0” so far.

That savings, Joseph said, has allowed charter schools to reinvest money they otherwise would spend on facilities into instruction; the study he described estimated the savings are equivalent to about 10 additional teachers per charter school on average. He told committee members that the state’s two-pronged policy is unusual because it addresses schools’ needs at different points in their lifecycle: short-term start-up financing and later long-term bond financing supported by the state’s credit enhancement.

“Right now it’s capped out,” Joseph said of the program’s capacity for new borrowers, and he urged maintaining rigorous criteria while increasing capacity to meet demand. He said private philanthropic matches — including support from the Albertson Foundation — and intermediaries such as Building Hope have multiplied the impact by helping schools transition from short-term loans to lower-cost long-term financing, and by preventing developers from charging schools for post‑purchase appreciation.

Committee members and charter school advocates pressed for details about program criteria and current limits. Representative Nelson requested the criteria that made Idaho’s approach successful; Joseph replied that strict but reasonably attainable underwriting standards, a short-term revolving loan option, and the moral-obligation support working together are central to the outcome and that defaults have been “almost no defaults” in similar programs nationally.

Blake, speaking for the Idaho Charter School Network, outlined a separate change to state per‑student facility funding enacted last year: the state moved to a flat $400 per-student facility allocation for charter schools. He said the elimination of a prior state lottery distribution reduced charter facility funding by about $100 per student, and that restoring that $100 would carry an estimated fiscal note of about $3,000,000 and would affect charter schools only. “Last year two things happened around the state’s charter school facility funding,” Blake said. “We had to change how the formula is calculated … we did a hard number of $400 per student for charter school facility… the charter schools lost that, it was about $100 a student, so we’re about $100 a student behind where we would have been.”

Committee members also asked whether other states are adopting Idaho’s model. Joseph said several states are considering moral-obligation programs, but he did not identify another state combining both well‑designed short-term revolving funds and long-term credit enhancement at Idaho’s scale. When asked about the scale of unmet demand, Joseph and Blake said interest in charter capacity remains strong across urban and non‑urban areas; Blake said the current charter waitlist is about 6,000 students and that demand is likely to grow as Idaho’s school‑age population expands.

No formal action on the financing programs was taken during the meeting; presenters offered to follow up with committee members with additional documentation and criteria details.

The discussion highlighted three immediate policy trade-offs: (1) preserving stringent eligibility criteria to limit fiscal risk while expanding program capacity to meet demand; (2) the role of philanthropic matching and intermediaries in leveraging state dollars; and (3) whether the Legislature will consider restoring the roughly $100-per-student reduction (estimated at $3,000,000) that Blake said resulted from the elimination of prior lottery distributions.

Matthew Joseph and Blake said they would provide follow-up materials to committee members on program criteria, current caps, and options for expanding capacity.