Study: Idaho tools cut charter school facility costs, free up funds for teachers

Matthew Joseph, senior policy advisor at AccelinEd, told the Idaho Senate Education Committee that Idaho n interlocking set of programs has sharply reduced charter school facility costs and freed money for teachers and classroom instruction.

Joseph said the state oes not appear to have spent direct appropriations on the program so far and that the combination of a short-term revolving loan fund and a later-stage credit enhancement has produced large savings. "The state so far has spent $0 to do this," Joseph said. He told the committee his organization's analysis shows roughly $113,000,000 in savings over the period studied and that, when annualized against Idaho teacher salaries, the savings equal about 10 teachers per charter school.

The study Joseph described examined three policy levers states use to help charter schools with facilities: direct facility funding, access to surplus district buildings, and financing supports. Idaho ccording to Joseph—mphasized financing supports. Joseph told the committee that the average Idaho charter school spends $1,857 per student on facilities and, without supports, would need to shift about $1,294 per student from operating budgets to cover those costs.

Joseph outlined how the state—irst provides short-term, low- or no-interest loans from a revolving fund to new charter operators so they can establish a track record; after several years these schools can access long-term financing from the private bond market assisted by a state credit-enhancement program often described as a "moral obligation." That credit enhancement lowers interest rates charged by private investors, Joseph said, and so reduces long-term debt service.

Joseph cited local examples in his presentation. He said Sage International in Middleton benefited from the state's long-term credit enhancement and was able to expand programs that carry higher staffing costs, including an International Baccalaureate program. Idaho Novus Classical Academy used the revolving loan fund and philanthropic matching to reach bank financing terms that otherwise would have been unaffordable, Joseph said, and Elevate Academy in Caldwell used savings to support career-technical classes and smaller class sizes for at-risk students.

Joseph also described a multiplier effect: philanthropic matching (he cited the Albertson Foundation) and a program manager (Building Hope) that smooths transitions from short-term loans to long-term bonds both increase the overall impact. He warned that demand for the moral-obligation credit enhancement has grown so strong that the program has hit a statutory or administrative cap and may need its limit raised to serve additional schools, a constraint Joseph said policymakers should consider.

Joseph summarized the methodology briefly: AccelinEd compared Idaho charter schools that used the state supports to similar schools in other states that did not, and estimated the difference in interest rates and total annualized cost. He emphasized there have been no defaults in Idaho under the program to date, which is why the program has not required a state outlay so far.

The presentation concluded with an invitation from Joseph to the committee to consider Idaho s a model for other states and to attend AccelinEd—xternal events to review the study. The committee had no follow-up questions at the meeting.

Ending: Joseph said the findings show financing policy can translate into more teachers in classrooms rather than higher overhead; he told the committee he is available as a resource and that AccelinEd and its local partners continue to monitor program demand and capacity.