Overview of States’ Policies That Help Chartered Schools Secure Facilities

November 11, 2016 • Krista Kaput

This blog post is the second in a two-part set on charter school facilities. Our first post was on the Minnesota lease aid program and “affiliated building corporations” (ABCs). This post will examine strategies and initiatives that other states have implemented.

One of the biggest challenges faced by chartered schools in Minnesota and in other states is securing appropriate facilities. Recognizing the unique struggle that chartered schools face with leasing, purchasing, and renovating buildings, several states have created laws to assist with these challenges, in particular by offsetting costs. We describe six categories of such policies below.

1. State Lease Aid Funding

Of the 43 states that have charter laws, just over half allow charters to purchase buildings directly. However, even in states where it’s legally permissible, due to the high cost of purchasing a facility most charter schools end up renting their building. As described in our earlier blog post in this set, 15 states and the District of Columbia have dedicated state “lease aid” programs to help charter schools with these rental costs.

2. State Charter Start-Up Grants

Fifteen states and Washington DC have state-level grant programs that provide financial support to chartered schools for start-up costs, similar to the federal Charter Schools Program grants. Many schools use these state funds for renovating and remodeling facilities; in some states, the grants can also be used to purchase or construct facilities. For example, the State of New York has appropriated approximately $4.8 million to a fund, which provides discretionary financial support for startup costs including those associated with obtaining, renovating, and constructing facilities.

Of the sixteen jurisdictions with a grant program in law, only seven are currently providing funding for these programs.

3. State Loan Programs

Eleven states and DC have created chartered school facility loan programs. The purpose and terms of the loans depend on the state’s law. For example, Louisiana offers zero-interest loans of up to $100,000 that can be used for facility renovations, repairs, or acquisition. Similarly, in California, the Charter School Revolving Loan Program provides loans of up to $250,000, which have to be paid back within five years, for new chartered schools’ start-up costs.

Of the twelve jurisdictions with a loan program in law, only six are currently providing funding to those programs.

4. Access to District Facilities Programs

There are currently seven states that ensure that chartered schools have access to the same state facilities programs as traditional district schools. For example, in Washington it is law (WA 28A.710.230) that public charter schools are eligible for state matching funds for school construction.

5. Local Property Tax Dollars

Five states provide public charter schools with access to local property tax dollars that are generated for facilities. In Ohio, for example, the law allows school districts to levy taxes for chartered schools that are sponsored by “exemplary” authorizers.

6. Access to State/School District Facilities

Twenty-seven states have policies that require districts to publish an annual list of vacant and unused buildings, and/or require districts to give chartered schools the right of first refusal to use or purchase those unused buildings. For example, Arkansas law (AZ 15-189) gives chartered schools the right of first refusal to purchase or lease at fair market value a closed district school or unused portions of a school building located in a district from which it draws its students.

See a full list of states that use the programs described above. For more information about state initiatives and policies that assist chartered schools with facility finances, see the National Alliance for Public Charter Schools April 2015, May 2015, and September 2016 State Policy Snapshots, as well as the Education Commission of the United States’ January 2016 state comparison.

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