Arizona
State Financing Map
Overview
Arizona’s charter public school law was enacted in 1994. Since then its charter sector has grown to 557 charter schools serving 207,923 students in the 2018-19 school year. According to a ranking by the National Alliance for Public Charter Schools that measures state laws against its model charter school law, Arizona ranks 14th among the 45 states that have enacted a charter school law.
The Arizona facilities law provides charter schools with a per-pupil allocation called “additional assistance” that may be used for facility construction as well as other operational needs. The law creates a $24 million public school Achievement District fund that will provide monies to public schools—including charters—that have a demonstrated waitlist, plan to expand or replicate, and commit to mentoring low-performing schools. Recent legislation also created a public school credit enhancement fund, which can be leveraged to provide more than $300 million in low-cost financing for quality schools, including charter schools.
State Resources & Additional Information
Arizona State Board for Charter Schools
Summary Updated: July 2021
Charter schools in Arizona receive a per-pupil allocation called “equalization assistance,” which consists of a base support level and “charter additional assistance.” State legislation stipulates that “equalization assistance” is provided as a single amount based on student population, without categories distinguishing maintenance and operations from capital projects. Therefore monies can be used for any educational expenditure, ranging from teacher salaries to transportation to facility construction. For FY2017, the average amount of the “charter additional assistance” component is $1,752 per pupil in grades K–8 and $2,042 per pupil in grades 9–12.
Last Updated: June 2017
The Arizona Public School Credit Enhancement Program was established to reduce borrowing costs for schools by ensuring that bonds will be repaid even if the school is not able to make a payment. The program creates an “insurance fund” for the purpose of repaying participating public schools’ principal and interest payments on debt financing in the event a school defaults. The program is funded at a fixed rate of $100 million, with $20 million coming from monies previously appropriated for this purpose and $80 million from the State Treasurer’s pool of investments. The Credit Enhancement Program projects that the $100 million will enhance approximately $350 million of bonds issued for the benefit of public schools participating in this program.
To be eligible to participate in the Credit Enhancement Program, a school must be admitted as a member school in the Achievement District, a grouping of highly rated schools. To be eligible for the Achievement District a school must meet the following criteria:
- the assignment of a letter grade of A, or an equivalent successor classification, pursuant to A.R.S. § 15-241
- proven instructional strategies and curricula that demonstrate high academic outcomes
- verifiable enrollment demand, including the placement of prospective pupils on waiting lists
- a sound financial plan that contemplates operational costs and future enrollment growth
- a commitment to provide technical assistance, including business services, curriculum development, and teacher training, to an underperforming school in the state
The Credit Enhancement Eligibility Board is responsible for managing and directing the Arizona Public School Credit Enhancement Program. The Board is made up of the governor, the state treasurer, and the director of the Arizona Department of Administration, or their designees. Schools approved for credit enhancement are required to pay an annual program participation fee as determined by the board. Charter schools are required by statute to pay an annual participation fee equal to at least 0.25% of the school’s total outstanding principal that is enhanced through the fund. The participation fee for district schools, if any, will be set by the board. The first round of applications for this program began in March 2017.
Last Updated: June 2017
Arizona law established The Charter School Stimulus Fund to provide financial support to charter schools for start-up costs related to renovating and remodeling existing buildings and structures. The fund was administered by the department of education and funded through legislative appropriation, grants, gifts, and donations from any public or private source. This fund is no longer active.
Last Updated: June 2017
Arizona law requires the state department of education to compile and publish an annual list of vacant and unused buildings, or portions of buildings, owned by the state or school district. School districts are prohibited from excluding charter schools from negotiating to buy or lease a facility in the same manner as other potential buyers or lessees but are not required to sell or lease to a charter school or any other party.
Last Updated: June 2017
Pursuant to the provisions of the Constitution of the State of Arizona and the Industrial Development Financing Act (title 35, chapter 5, articles 1 through 5 of the Arizona Revised Statutes, as amended), educational institutions or organizations established as charter schools under title 15, chapter 1, article 8 of the Arizona Revised Statutes and owned by nonprofit organizations may apply for bond financing through the Arizona Industrial Development Authority as well as various city and county industrial development authorities in Arizona. The Arizona Industrial Development Authority, the Industrial Development Authority of the County of Pima, and the Industrial Development Authority of the City of Phoenix are outlined below as examples of conduit issuers that have issued debt on behalf of numerous charter schools in Arizona and other states.
Last Updated: June 2017
The Arizona Industrial Development Authority (AZIDA) is an Arizona nonprofit corporation designated as a political subdivision of the State of Arizona incorporated with the approval of the Arizona Finance Authority. Pursuant to the Industrial Development Financing Act of the Arizona Revised Statutes, the AZIDA is empowered to issue its bonds to provide funds for financing and refinancing the costs of the acquisition, construction, renovation, equipping, and improvement of qualifying projects as defined in the Act. Acting as a conduit, the Authority provides a formal mechanism through which eligible charter schools may access both tax-exempt and taxable bond financing. The AZIDA first began assisting charter schools in December 2016 and to date has closed 68 offerings totaling $2,925,189,394 million for facilities projects benefitting over 120 charter schools in 21 different states.
Last Updated: July 2022
The Industrial Development Authority of the County of Pima (Pima IDA) is a nonprofit corporation designated as a political subdivision of the State of Arizona incorporated with the approval of Pima County, pursuant to the provisions of the Arizona Constitution and the Industrial Development Financing Act (title 35, chapter 5, articles 1 through 5 of the Arizona Revised Statutes, as amended). The Pima IDA is empowered to issue bonds to provide funds for the financing or refinancing of costs associated with the acquisition, construction, improvement, rehabilitation, or equipping of a “project” as defined in the Act, including educational facilities for charter schools. Since 2005 the Pima IDA has issued more than $1 billion in tax-exempt and taxable bond financing on behalf of charter schools in 93 transactions, including $77.6 million for four charter schools outside of Arizona—two transactions in Ohio and one each in Nevada and Delaware.
Last Updated: June 2017
Note: Unable to confirm with Pima IDA
The Industrial Development Authority of the City of Phoenix, Arizona, (Phoenix IDA) is an entrepreneurial nonprofit that works to support community and economic development through access to capital. The organization improves communities through multiple strategies such as public finance, loans and investments, and down payment assistance to advance homeownership.
Charter schools are able to access bond financing through the Phoenix IDA pursuant to the Industrial Development Financing Act of the Arizona Revised Statutes. The Phoenix IDA may issue bonds for charter school projects located anywhere in the State of Arizona, and throughout the United States, if the project benefits residents within the state, as determined by the Phoenix IDA’s board of directors. Since 2009 the Phoenix IDA has issued bonds to finance more than $1.9 billion in various projects, including $826.7 million for charter schools, across the country.
Last Updated: September 2017
Disclosure: Information on this page has been provided by the organization. Any questions related to figures or programs listed should be directed to the contact shown above. Keep in mind that each school’s situation will differ slightly and you’ll need to speak to the contact listed for information specific to your school.
Service Providers
Find capital providers in Arizona