Idaho financing programs cut charter schools' facility costs, speakers say

A policy adviser and charter school advocates told a legislative committee that Idaho’s combination of a revolving loan fund and a moral-obligation credit support has reduced facility financing costs for charter schools, producing what the presenter described as $113,000,000 in savings to date while the state has not recorded defaults.

Matthew Joseph, Senior Policy Advisor for Education Funding with ExcelinEd, told the committee that “so far it’s cost to state $0,” and that the savings the group calculated would let charter schools reinvest more in instruction — “and that means that every school … has the ability to hire 10 additional teachers.”

The presentation summarized a study of Idaho charter school facility financing that compared market interest rates to financing outcomes where schools used state-backed tools and philanthropic matches. Joseph and Idaho advocates said the state’s approach pairs short-term, low- or no-interest loans during a school’s startup phase with later credit support for long-term bond financing, and that private philanthropy and organizations such as Building Hope and Bloom have multiplied the impact.

Why this matters: Committee members were told the financing savings free operating dollars that schools typically must use for facility costs. The presenters said charter schools still spend, on average, $1,857 per student on facilities and that after state supports those schools must still find about $1,294 per student from operating budgets — dollars the advocates said would otherwise fund instruction. That remaining burden, the presenters and advocates said, is larger in Idaho than in many states where facility support covers a higher share of costs.

Details from the presentation and Q&A

- Savings and cost: Joseph described the study’s headline figures as $0 net cost to the state to date and $113,000,000 in cumulative savings to Idaho charter schools. He attributed much of the savings to the state’s revolving loan fund (short-term, no-interest loans cited in the presentation) and to later credit enhancement that lowered long-term borrowing costs.

- Lifecycle approach: Joseph said Idaho’s policy design targets two stages: short-term loans at startup (about $2.5 million loans, as described in the presentation) and a later transition to long-term bond financing supported by the state’s moral-obligation backing. That lifecycle combination, he said, is more effective than a single approach.

- Private matching and program design: Joseph credited philanthropic matching (the Albertson Foundation was named in the presentation) and intermediaries such as Building Hope for preventing schools from being charged appreciation-based payoffs when they refinance. He described that structure as a multiplier that reduced the amount schools needed from commercial lenders.

- State facility funding changes and a fiscal request: Blake (last name not provided), speaking for the Idaho Charter School Network, summarized recent changes to per-student facility funding and their effect. He said the Legislature moved facility funding to a flat $400 per student; the elimination of certain state lottery distributions removed about $100 per student the charters had previously received, and restoring that $100 would carry an estimated $3,000,000 annual fiscal note. Blake said that proposed fix would affect charter schools only.

- Demand and wait lists: Responding to a question about demand, Blake corrected an earlier figure cited by another member and said, “The current wait list is 6,000.” He and others described demand driven by population growth, parents seeking themed or career-technical options (for example, Elevate Academy’s career-technical emphasis), and charter availability in fast-growing areas such as the Treasure Valley.

- Caps and capacity: Committee members pressed on program caps. Joseph said the revolving loan fund size and the moral-obligation program have capacity limits; he described the moral-obligation support as having “hit its limit,” preventing some new schools from accessing that credit enhancement. He urged that maintaining rigorous but clear criteria while increasing capacity could let the state meet demand without taking undue risk.

Committee reaction and next steps

Representatives asked for more detail on the statutory criteria used to qualify applicants, and Joseph offered to provide the written criteria and follow up with staff. Blake said advocates will “be trying to work with you to make charter schools whole again” on the lost $100 per student and to pursue increasing the cap on the moral-obligation program.

What the committee did not do: No formal votes or statutory changes were recorded at the meeting on the financing programs; the discussion was a presentation and Q&A and concluded with staff follow-up requested.

Ending

Presenters and advocates characterized Idaho’s combination of state-backed short-term loans, later credit enhancement for bonds, and philanthropic matching as a “national success story” in lowering facility costs for charter schools, while noting remaining gaps — including a maintenance of a per-student shortfall and program capacity limits — that legislative action could address in the session ahead.