California
State Financing Map
Overview
California’s charter public school law was enacted in 1992. Since then its charter sector has grown to 1,275 charter schools serving 630,300 students in the 2017-18 school year. According to a ranking by the National Alliance for Public Charter Schools that measures state laws against a model charter school law, California ranks 24th among the 45 states that have enacted laws related to charter schools.
California facilities law created the Charter School Facility Grant Program (via SB 740) that provides a per-pupil lease reimbursement to charter schools where 55% of students qualify for free and reduced-price lunch either at the charter school or in its local elementary school attendance area; payments may not exceed 75% of total annual facilities rent costs. Under California law, the Charter School Facilities Program authorizes the State Allocation Board to provide per-pupil facilities grant funding for 50% of the total project cost for new construction or renovation of charter facilities. The Charter School Revolving Loan Program provides below-market loans of up to $250,000 for new-start charter schools, allowing up to five years for repayment.
State Charter School Facilities Incentive Grant Award Total: $147.8 million—Fiscal Years 2004 through 2008, Fiscal Years 2009 through 2013, and Fiscal Years 2014 through 2018.
State Resources & Additional Information
U.S. Department of Education (ED) Credit Enhancement Award Total: $8.3 million—Fiscal Year 2011
The California School Finance Authority (CSFA) was created in 1985 to finance educational facilities and working capital for school districts and community college districts. Since its inception, CSFA has developed a number of school facilities financing programs, and has recently focused on assisting charter schools to meet their facility and capital needs. Since 2007 CSFA has been able to issue debt on behalf of California charter schools. CSFA administers the five programs outlined below and acts as conduit issuer on behalf of charter schools.
Conduit Financing
Beginning in 2010, CSFA began serving as a conduit bond issuer on behalf of nonprofit charter schools to provide access to the capital markets. Through its California Charter School Conduit Financing Program, CSFA offers both tax-exempt and taxable debt options, a low-cost fee structure, as well as a no-cost, state-level Tax Equity and Fiscal Responsibility Act (TEFRA) hearing process. Charter schools participating in the program are required to pledge an intercept of a portion of their state per-pupil revenue in order to secure the school’s share of debt service due on the conduit debt, pursuant to section 17199.4 of the Education Code of the State of California. Since 2010 CSFA has issued more than $1 billion for California charter schools in 59 transactions of which 46 were for bonds totaling $940.1 million and 13 were for notes totaling $70 million.
Last Update: June 2017
Established in 2001, the Charter School Facility Grant Program provides an annual appropriated reimbursement of up to $750 per pupil for up to 75% of actual facilities rental and lease costs. A charter school is eligible only if it operates a classroom-based instructional program and is located in an elementary school attendance area or has a student population of which at least 55% is eligible for the federal free and reduced-price lunch program. In FY2010 the program began allocating grants to eligible charter schools on a current-year basis rather than reimbursing for prior year expenses.
Beginning in July 2013, Chapter 48 of Assembly Bill 86 authorized the transfer of the administration of the Charter School Facility Grant Program from the California Department of Education to CSFA. Since its transfer to CSFA administration, funding to charter schools has increased from $47 million in 2011-2012 to $112 million in 2016-2017. Additionally, the creation of an online application has streamlined the process, saving both time and money for the applicants and state. In 2017 the annual appropriated reimbursement was increased from $750 per pupil to $1,117 per pupil, and a provision for annual cost inflation was added to ensure adequate funding.
CSFA used its $8.3 million ED credit enhancement grant to fund the primary debt-service reserve requirement for debt issued by or through the CSFA for an awardee charter school. The program covered debt issued by or through the CSFA to acquire, renovate, or construct charter school facilities, or refinance existing charter school facility debt. The total of $8.3 million has been deployed into bond debt-service reserve funds facilitating $150 million in financings for 35 charter schools.
In 2002, California created the Charter Schools Facilities Program (CSFP) through Assembly Bill 14, which provides per-pupil facilities grant funding for 50% of the total project cost for new construction of charter school facilities and is jointly administered by the CSFA and the Office of Public School Construction (OPSC). CSFP was expanded in 2006 to allow grant funding to be used for rehabilitation of existing district-owned facilities that are at least 15 years old for use by charter schools.
CSFP funding is available only to charter schools that provide site-based instruction for at least 80% of the time and are determined to be financially sound by CSFA. In addition, the grant funding requires a 50% local match. The state provides a long term, low interest loan option whereby a school can borrow from the state in lieu of raising matching funds. Grant awards are made in the form of preliminary apportionments (i.e., reservation of funds), which must be converted to a final apportionment within a four-year period to adjusted grant apportionments.
CSFP has received $1.4 billion in bond funding through four different propositions, most recently Proposition 51, which allocated an additional $500 million for CSFP beginning in 2017. In addition, CSFP reuses funds received from project recessions, payments on long term loan matching shares, and cost adjustments during a project’s development. This has allowed CSFP to award more than its initial $1.4 billion allocation of bond funds.
To date the program has awarded more than $1.55 billion to 119 charter schools. Interest rates for all completed projects funded and in repayment are below 3%.
| Funding Round | Initial Preliminary Apportionment Month/Year | Award Fund by Proposition | Award Amount ($ in millions) | Number of Active or Completed Projects |
|---|---|---|---|---|
| Proposition 47 | July 2003 | Prop 47 | $28.3 | 2 |
| Proposition 55 | Feb 2005 | Prop 55 | $245.8 | 16 |
| Proposition 1D | May 2008 | Prop 1D | $267.1 | 19 |
| 2009 Funding Round | May 2010 | Prop 47/1D | $122.8 | 13 |
| 2014 Funding Round | November 2014 | Prop 47/55/1D | $213.7 | 14 |
| Proposition 51 | January 2018 | Prop 51/1D | $673.0 | 55 |
*Includes Preliminary Apportionments
Last Updated: April 2019
As of FY2014, California charter schools can apply directly or jointly with their charter authorizing entities to CSFA (previously this program was operated by the California Department of Education) for low-interest loans from the state’s Charter School Revolving Loan Fund (CSRLF) for purposes established in their charters. CSRLF was established in 1996 and is available to non-conversion charter schools that have not yet had their charters renewed and are not more than five years old. Priority is given to new charter schools using loans for start-up expenses.
A charter school may receive multiple loans as long as the total amount does not exceed $250,000, and loans must be repaid within five years. Funds may be used for, but are not limited to, leasing and renovating facilities. Loans carry a fixed interest rate that is generally several percentage points below market rates. Funds not used in any given year are carried over to the next fiscal year.
Since CSFA took over administration of CSRLF in 2013-2014, more than $58.5 million has been disbursed to 226 charter schools. From 2013-2014 to 2017-18, CSFA has collected from and closed on 281 loans and has recycled $53.1 million for additional awards.
| Fiscal Year | Available Funds ($ in Millions) | Disbursed Funds ($ in millions) | Number of Loans |
|---|---|---|---|
| 2008-09 | $17.0 | $9.5 | N/A |
| 2009-10 | $10.0 | $2.8 | N/A |
| 2010-11 | N/A | N/A | N/A |
| 2011-12 | $13.7 | $12.1 | 51 |
| 2012-13 | $11.0 | $10.4 | 36 |
| 2013-14* | $10.0 | $10.3 | 42 |
| 2014-15 | $12.0 | $12.0 | 48 |
| 2015-16 | $8.2 | $7.0 | 32 |
| 2016-17 | $9.6 | $8.5 | 35 |
| 2017-18** | $9.3 | $8.4 | 35 |
| 2018-19*** | $9.5 | N/A | N/A |
* Transferred from CDE to CSFA
**Active as of April 2019
***Awards expected to made in May and June 2019
Last Updated: April 2019
This California mandate, which passed in the November 2000 general election, requires school districts to provide "reasonably equivalent" facilities to charter school students.
Last Updated: July 2022
An initiative of the Los Angeles Unified School District (LAUSD), Los Angeles’s Bold Competition—Turning Around and Operating Its Low-Performing Schools (also known as the Public School Choice or PSC process) focused on enhancing the distinctive features of an open competition. Implemented from 2009 to 2014, the PSC process allowed teams of internal and external stakeholders to submit competitive proposals to turn around the district's lowest performing "focus" schools (selected by LAUSD administrators based on a diverse set of performance indicators) and to operate newly constructed "relief" schools designated to ease overcrowding (built using funding from state and local bonds). The district's theory of change behind PSC was that through rigorous screening of school plans, competition, intensive supports, district accountability, appropriate autonomies, and community and parent involvement, a range of school providers would be able to turn around low-performing schools and increase student achievement. The ultimate goal of this reform was to build a diverse portfolio of high-performing schools tailored to and supported by the local community.
LAUSD ran four rounds of the PSC process, impacting more than 80 campuses and well over 100,000 students. Through this process 16 schools were awarded to charter operators.
Last Updated: April 2017
Note: Unable to confirm with LAUSD
The California Municipal Finance Authority (CMFA) is a joint powers authority whose mission is to support economic development, job creation, and social programs throughout the state while giving back directly to California communities. The CMFA shares 25% of the issuance fees collected on a transaction with the sponsoring community and provides a grant equal to another 25% of the issuance fees to the California Foundation for Stronger Communities to fund charities located within the sponsoring community. Charter schools in California are eligible to access tax-exempt and taxable financing through the CMFA for their facilities projects. The CMFA has closed 26 bond offerings totaling more than $442 million for charter schools in California.
Last Updated: September 2017
Charter schools in California also have access to tax-exempt bond financing for their facilities needs through the California Statewide Communities Development Authority (CSCDA), which is a joint powers authority sponsored by the California State Association of Counties and the League of California Cities. Pursuant to the Joint Exercise of Powers Act (chapter 5 of division 7 of title 1 of the Government Code of the State of California), CSCDA was created in 1988 to provide California’s local governments and qualified nonprofit organizations access to tax-exempt financing for community-based public benefit projects that build community infrastructure, provide affordable housing, create jobs, promote access to quality healthcare and education, and more. In addition to CSCDA’s traditional 501(c)(3) Nonprofit Conduit Bond Program, charter schools in California are also eligible to apply for its Small Issue Public Benefit Program designed to cost-effectively assist projects ranging from $1 million to $7 million via private placement of the tax-exempt bonds with qualified institutional buyers. To date CSCDA has completed 17 charter school facilities financings totaling more than $281.3 million.
Last Updated: July 2022
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 California