The Council of Development Finance Agencies (CDFA) prepared this report to demonstrate how charter schools can access development finance tools and programs for the acquisition and renovation of school facilities. This overview lists the many types of popular programs that are accessible to charter schools plus lesser known examples such as Tax Increment Financing and Community Development Block Grants. The report provides relevant, real-world examples of how these programs have been successfully implemented.
In 2019, the charter school tax-exempt bond sector registered another record volume year with issuance exceeding $3.7 billion—up from almost $3 billion in 2018 and representing a robust 25% increase. This record volume was the seventh annual record out of the last eight years.
Financing a charter school facility is challenging enough. Refinancing a charter school facility is often a larger project and has more consequences because long term debt can last for 30 years or more. The stakes can be significant when locking into long term financing. A favorable refinancing can allow a school to save money and redirect valuable resources to teaching and learning for the next 30 years.
Thanks to support from Bluum in Idaho, we prepared this Charter School Facility Refinancing Guide and Toolkit to help schools address the considerations that should be taken into account to ensure refinancing in a timely manner on terms that will best foster a school’s long-term academic and financial success.
Public charter school facilities projects need loan capital and place-based revolving loan funds (RLFs), often managed by state and local governments, are a promising solution. This paper provides 10 Building Blocks for prospective state and local funds to consider based on the experience of existing funds. In addition to the 10 Building Blocks, other considerations are explored as to how RLFs can exert influence over the quality of charter schools within its service area, and the importance of ongoing measurement and reporting of Fund performance.
The third edition of Borrowing with Tax-Exempt Bonds provides public charter schools with information about tax-exempt financing, including information about who and what types of projects qualify for tax-exempt financing and how to decide if tax-exempt financing might be right for your school. It also provides best practices, insights, based on years of experience, and what to expect from financing participants.
As the public charter school sector continues to mature, more schools than ever are accessing the bond market to finance their next school building. As they do so, the interest they pay is funded by a school’s operating costs (which are provided through taxpayer dollars), meaning every extra basis point in interest represents fewer dollars available for textbooks, teacher salaries, and field trips.
As states seek to use their education budgets more efficiently, moral obligation bonds are an attractive option to lower interest rates without overburdening the state’s balance sheet. Take a look at how and why some states are turning to moral obligation bonds to fund charter school facilities.
Moral obligations are a little known tool that a few states have used to help charter schools save on borrowing costs. This paper explores the use of moral obligations for charter school facilities, and outlines Utah and Colorado’s active Moral Obligation programs for charter schools.
This paper examines what can be done at the federal level to provide additional resources to charter schools to access school buildings, and to create incentives for states to address inequities in the allocation and funding of buildings. The ideas presented in this paper are the result of a one-day convening of more than 30 charter school facility policy experts, finance experts, practitioners, and nonprofit lenders. They include changes that policymakers can make to strengthen existing programs as well as
This report looks at how states are enacting policies to help offset the cost of leasing, purchasing, and maintaining public charter school facilities. Out of the 45 jurisdictions that have charter school laws, 31 have at least one charter school facilities funding policy in place. Colorado, New Mexico, and Ohio lead the states, with each adopting four of the policies. Even within the five categories analyzed, policies vary widely. This snapshot provides a state-by-state overview of charter school facilities funding laws that illustrate the variety of ways in which states have addressed charter school facility funding issues.
The 2018 charter school tax-exempt bond market dipped in volume for the first time since 2011, and it is perhaps likely that this past year may be repeated in 2019 and even a few years beyond. A bright light: the overall charter school bond sector will likely to continue to see the strengthening of average credit quality. This report looks at the contributing factors impacting the bond market and what caused the record growth to slow this last year.
One of the greatest challenges to the health of the charter public school movement is access to adequate facilities in which to operate. Charter school facilities are rarely funded on par with school district facilities. Over the years, more states have come to realize that they have an obligation to ensure that children in all public schools, district and charter, have access to adequate school buildings.
As state lawmakers consider policies giving charter schools better access to district facilities, they must give serious thought to several issues, including:
- Creating an entity that will collect and freely share information on available buildings with charter schools;
- Giving charter schools the right of first refusal on available facilities;
- Determining what price, if any, charter schools should pay to lease or acquire available buildings; and
- Determining who will pay for renovation and upkeep of the facilities once charter schools are in them.
This report, School District Facilities and Charter Public Schools, provides a snapshot of the 28 states that have enacted policies that try to provide charter schools with better access to district facilities.
Earlier in 2021, the Charter School Facility Center published State Policy Analysis: Charter School and District Bond Offerings Charter Schools to understand the landscape of bond participations. This spurred interest in learning more about the details of these types of transactions. The Facility Center contacted Nicolas Watson of the California Charter Schools Association to provide insight into the experience of charter schools in California. There are numerous examples of charters working with local school districts.
The result of this research is the second report in a series exploring charter school inclusion in district bonds. This collection of case studies highlights the lessons learned from select school districts. These examples can provide a roadmap for other states to pursue a culture of state and district support for charter school facilities.
This brief from the Charter School Facility Center highlights some of the most promising practices identified around the country and provides local leaders with a framework for analyzing and prioritizing their local ecosystem of charter school facility policy, finance, and real estate solutions to improve charter school facility options.
In State Policy Analysis: Per Pupil Facility Funding, the Facility Center analyzes the 18 states with per pupil facilities funding, looking at the statutes, operations, and funding for these programs.
State funding for charter facilities has steadily increased from 1998 to 2019, with California, Florida, Minnesota, and Washington, DC exponentially increasing total appropriations for facilities. School Year 2018-2019 marked the highest total appropriate across the majority of the 18 states, and School Year 2019-2020 is on track to see another record-breaking year for state funding of charter school facilities. Yet, no state is close to covering the total costs of facilities.
More than 3,200 charter schools received facilities funding through these programs in School Year 2018-2019, serving more than 1.5 million students, totaling $1.1 billion. Yet nearly 3,800 charter schools and more than 1.6 million students did not receive funding through these programs.
In State Policy Analysis: State Support for School Facilities and Charter Schools, the Facility Center analyzes state funding for all public school facilities and identifies opportunities for charter schools to participate in this broader funding.
State appropriated funding for all public school facilities is a significant source of capital. In 2019, over $2 billion was spent on public school facilities by state legislature, in addition to all the funds spent by local school districts. Charter schools received only $68 million of that amount in states such as Colorado, Delaware, Florida and Minnesota.
There are opportunities for charter schools to share equitably in this source of funding.
State credit enhancement programs can provide effective, low-cost financing support for charter schools seeking to reduce costs for facilities financing. This is the third report in a series of State Policy Snapshots for Public Charter School Facilities, exploring credit enhancement policies that states are utilizing to help charter schools achieve more favorable financing conditions for their acquisitions.
While the federal Credit Enhancement for Charter Schools Facilities Program is widely known in the charter school community, there is significantly less information about the state programs. The purpose of this paper is to provide the charter school community and policy makers with a more complete picture of the credit enhancement that may be available to charter schools.
Just like traditional public school communities, charter schools, their employees, and their families need access to a myriad of financial services—including student loans and college-planning education. This report explores the potential for creating a charter school credit union to provide valuable financial services to the charter school community and to serve as a source of loan capital for charter school projects.
This report takes an in-depth look at the design and operations of Building Pathways, a Washington, D.C.-based charter school facility incubator that has provided short- and long-term space to more than 26 charter schools since its inception in 2006.
The National Charter School Resource Center published A Synthesis of Research on Charter School Facilities, a new, in-depth report on charter school facilities that examines the current state of charter school access to facilities, including facility acquisition and ownership, and facility funding and financing.
Charter schools often issue their own tax-exempt bonds because they are not included in the local school district bonds for school construction. Charter schools have to pay a higher interest rate and that leaves less money for education programming. There are a few instances where charter schools have been able to be included in a school district or state bond offering.
This is another report in a series of State Policy Analyses for Public Charter School Facilities, exploring charter school inclusion in district bonds. By working together, charter schools and school districts achieve more favorable financing conditions. Many of these partnerships are voluntary and collaborative while others are mandated by regulations.
The purpose of this paper is to provide the charter school community and policy makers with lessons learned from these partnerships to expand the practice of including charter schools in district and state bond offerings.