House Education Committee backs 10-year continuation of Credit Enhancement Eligibility Board

The Arizona House Education Committee voted to recommend continuation of the Credit Enhancement Eligibility Board for 10 years, until July 1, 2036, after a presentation from the Governor’s office described the board’s role in improving charter schools’ access to low‑cost capital. Vice Chair Michelle Pena moved the committee’s recommendation and members approved it by voice vote.

Ketcher Baden of the Governor’s Office told the committee the Credit Enhancement Eligibility Board was created in the FY2017 budget and was funded initially with roughly $24 million plus an $80 million funding obligation, creating an approximately $100 million enhancement fund used to improve the credit ratings of eligible borrowers. Baden said the statutory leverage cap of 3.5:1 limits the board’s guarantees to about $350 million in financings. “We are here today asking for a continuation of this board,” Baden said, describing it as a low‑cost, limited‑staff mechanism that remains necessary to act if an approved borrower defaulted.

Baden told members that 15 projects for nine charter operators were approved between 2017 and 2021 and that the program has not experienced defaults. He said most beneficiaries have been charter schools because district schools typically already have higher credit ratings tied to property tax bases.

Vice Chair Pena moved the continuation for a decade; the chair called a voice vote and the ayes prevailed. The committee’s recommendation will be forwarded as part of the sunset review record.

Why it matters: The board’s authority to provide guarantees can lower borrowing costs for charter operators pursuing capital projects or refinancing. Continuation preserves a statutory mechanism the Governor’s office and members said remains useful while the fund’s leverage remains largely committed.