16 Sep Facility Advocacy Pays Off – $8 Billion times

Charter schools continue to knock on the door of state facility funding and financing needed to secure the buildings they need. However, in the last decade of legislative sessions, states have quietly begun to open the doors to district facilities, local tax dollars, and state-backed capital programs. For school leaders, advocates, and facility funders, understanding these changes isn’t just “nice to know”; it shows what is possible with a concerted, long-term effort to help great schools open, expand, or even survive. Collectively, these changes will result in more than $8 billion in funding to charter schools across the country over a ten year period.

These are some of the most important trends in recent state policies affecting charter school facilities and financing and why they matter.

1. Opening the doors to district-owned buildings

One of the biggest cost drivers for charter schools is paying market-rate rent while sitting next to half-empty district buildings. Several states have moved to change that by mandating or strengthening access to underutilized district facilities that have already been paid for by taxpayers.

• Florida now allows some charter schools to co-locate in under-enrolled district schools rent-free.
• Ohio requires districts to sell underutilized buildings to charter schools. It is one of a growing list of states that give charter schools the right of first refusal for surplus buildings, require districts to publish an inventory of unused space, or enable low- or no-cost leases for charters in district facilities.

These laws are transformational. If implemented well, they can:

• Eliminate or drastically reduce lease costs.
• Shorten facility timelines (no ground-up construction).
• Place charters closer to the neighborhoods they serve instead of in remote industrial corridors.

For policymakers, the next frontier is clarity and enforcement: clarity on the definition and criteria of “underutilized” buildings and a transparent process for matching schools to buildings; and enforcement through dispute-resolution mechanisms that keep disagreements out of the headlines.

2. Per-pupil facilities funding and grant programs

Another trend is the growth of appropriations through per-pupil facilities aid or state grants, which puts facilities dollars on the same “following the student” logic as operating funds:

• States like California and Alaska have built substantial facility grants or per-pupil constructs into law. For example, Alaska’s statute authorizing a grant program for charter construction, lease, and major maintenance based on a per-pupil formula.
• In the 2025 state policy wins round-up, Illinois increased its charter facilities fund by $20 million, Texas removed a $60 million cap on facilities funding and added $100 million per year in growing formula funding, and Tennessee secured $25 million in dedicated charter facilities support.
• In 2026, Maryland passed its first per pupil facility funding formula.
• Recent State Facility Incentive Grant competitions (FY 2024–2025) have awarded new grants to states like Colorado, Ohio, and Texas nudging more states to create stable per-pupil facilities lines in their formulas.

3. Access to local tax dollars: bonds, mill levies, and infrastructure surtaxes

Access to local capital funding such as bonds, mill levies, and similar voter-approved tax measures has historically been the most unequal part of the finance picture. Traditional districts can fund buildings with tax-exempt bonds backed by local property tax, while most charters must cobble together leases and higher-cost debt.

That’s changing, slowly:

• Recent state legislative sessions have produced mill levy and local revenue-sharing wins. In 2025, Colorado secured full mill levy equalization for the Charter School Institute (CSI), closing a long-standing gap between CSI charter schools and district schools.
• Florida ensured charter access to local infrastructure surtax revenue, linking charters more directly to the same tax streams that districts use for facilities.
• Indiana legislation created local property tax sharing with charters and allowed new local facilities and transportation authorities to support shared infrastructure.
• Locally, Kansas City, Missouri charter schools were included in the Kansas City School District bond that was sent to the voters. With support from the charter sector, the vote passed the 57% threshold resulting in $50 million allocated to charter schools.

These laws matter because access to bond-like, voter-approved revenue does three things:

• Reduces reliance on general operating funds for facilities.
• Lowers borrowing costs by including projects in government backed bonds.
• Signals to capital markets that charters are being treated more like peers to districts.

For advocates, the goal is not just statutory access, but practical parity in ballot language, timing, and communications, so that voters understand charters are part of the same public system they’re being asked to support.

4. State revolving loan funds and credit enhancement: cheaper money, smarter risk

A major wave of innovation is happening in state-level capital programs designed specifically for charter school facilities.

Revolving loan funds

States like Idaho, New Jersey, South Carolina, California, and others are using state balance sheets to offer low- or no-interest loans that dramatically reduce all-in cost of capital:

• In 2023, Idaho created a $50 million revolving loan fund for newer charter schools and paired it with credit enhancement for longer-term bonds—an approach national experts now tout as a model.
• New Jersey enacted a law establishing a low-interest revolving loan program through the Economic Development Authority to finance construction and major renovations in high-need districts—its first dedicated charter facilities financing framework. This year it looks to fund the loan program.
• South Carolina operates a Charter School Facility Revolving Loan Program authorized in statute, providing low-interest loans for constructing, purchasing, renovating, and maintaining charter facilities.
• California has modernized its long-standing Charter School Revolving Loan Fund, increasing maximum loan amounts, allowing repeat borrowing within new caps, and expanding eligibility to schools recovering from natural disasters.

Because these funds revolve, every loan repayment can finance the next project, creating a sustainable pool of lower-cost capital.

State credit enhancement & moral obligation

Alongside loans, many states are expanding credit enhancement programs that wrap charter bonds with state backing:

• Idaho increased its credit enhancement cap to $750 million, dramatically scaling the amount of charter debt that can benefit from state support.
• Colorado raised the cap on its Charter School Moral Obligation Program to $1 billion in 2025. The program’s state “moral obligation” pledge boosts bond ratings and has already saved charters more than $100 million in interest since inception.
• In 2026, Oklahoma passed its first bond credit enhancement program to support up to $250 million.

States have increasingly turned to the federal Credit Enhancement for Charter School Facilities Program to provide funding that offer guarantees and other enhancements, unlocking billions in lower-cost private financing.

For schools, the practical effect of these programs is straightforward: more projects pencil out, and a smaller share of per-pupil funding ends up in the pockets of lenders.

5. Zoning, land use, and the “silent” barriers to facilities

Some of the most important policy moves don’t involve dollars at all; they deal with zoning and land use rules that quietly block or delay facilities projects:

• Indiana’s 2025 package included zoning improvements and the creation of a local authority to manage shared facilities and transportation, aiming to reduce friction around siting and infrastructure use.
• Arizona law spotlights fair treatment in land use policies and the need to treat charter schools comparably to other public schools in zoning rules and fees.
• The new Housing Bill passed in 2026 could be a model for improving zoning policies for schools.

When charter schools are treated as “commercial” rather than “public” uses, projects can face higher costs, longer timelines, and outright denials. Aligning zoning treatment with their status as public schools is a low-cost, high-impact reform.

Conclusion

Recent research on state facility policies like the National Alliance for Public Charter School’s State Policy Resources Hub underscores a simple reality: despite all this progress, facilities remain one of the biggest constraints on charter growth, particularly for schools serving low-income students.

The new wave of policies across district building access, per-pupil facilities aid, mill levy sharing, revolving loan funds, credit enhancements, and zoning are slowly building a more complete facility ecosystem.

For school leaders, understanding this ecosystem can unlock options that didn’t exist five years ago. For policymakers and funders, the challenge is to knit these tools together intentionally, so that a high-quality charter in a high-need community has a clear, predictable path from idea to permanent, affordable facility.

Done well, state facilities policy is not just about bricks and mortar. It’s about whether public school choice can truly scale without sacrificing financial sustainability—or the quality of the buildings where students learn.